Sir2 is a NAD(+)-dependent histone deacetylase that controls gene silencing, cell cycle, DNA damage repair, and life span. Prompted by the observation that the [NAD(+)]/[NADH] ratio is subjected to dynamic fluctuations in skeletal muscle, we have tested whether Sir2 regulates muscle gene expression and differentiation. Sir2 forms a complex with the acetyltransferase PCAF and MyoD and, when overexpressed, retards muscle differentiation. Conversely, cells with decreased Sir2 differentiate prematurely. To inhibit myogenesis, Sir2 requires its NAD(+)-dependent deacetylase activity. The [NAD(+)]/[NADH] ratio decreases as muscle cells differentiate, while an increased [NAD(+)]/[NADH] ratio inhibits muscle gene expression. Cells with reduced Sir2 levels are less sensitive to the inhibition imposed by an elevated [NAD(+)]/[NADH] ratio. These results indicate that Sir2 regulates muscle gene expression and differentiation by possibly functioning as a redox sensor. In response to exercise, food intake, and starvation, Sir2 may sense modifications of the redox state and promptly modulate gene expression.