The p63 gene, a member of the p53 family, is expressed as TA and ΔN isoforms. ΔNp63 is the predominant isoform expressed in cells of epithelial origin and frequently overexpressed in cancers. However, what regulates p63 expression is uncertain. Here, we showed that ΔNp63 is regulated by the transcription factor DEC1, a p53 family target. We also showed that the ability of DEC1 to regulate ΔNp63 is enhanced by histone deacetylase (HDAC) inhibitors or knockdown of histone deacetylase 2 (HDAC2). Consistent with this, we found that DEC1 and HDAC2 physically interact and knockdown of HDAC2 leads to increased binding of DEC1 to the ΔNp63 promoter. Interestingly, we found that growth suppression induced by HDAC inhibitors is attenuated by ectopic expression of DEC1 in a ΔNp63-dependent manner. In addition, we showed that ectopic expression of DEC1 inhibits, whereas knockdown of DEC1 promotes, keratinocyte differentiation via modulating ΔNp63 expression. Finally, we showed that DEC1 cooperates with HDAC inhibitors to further decrease keratinocyte differentiation. Together, we conclude that ΔNp63 is a novel target of DEC1 and HDAC2 and modulates the efficacy of HDAC inhibitors in growth suppression and keratinocyte differentiation.