NADPH has long been recognized as a key cofactor for antioxidant defence and reductive biosynthesis. Here we report a metabolism-independent function of NADPH in modulating epigenetic status and transcription. We find that the reduction of cellular NADPH levels, achieved by silencing malic enzyme or glucose-6-phosphate dehydrogenase, impairs global histone acetylation and transcription in both adipocytes and tumour cells. These effects can be reversed by supplementation with exogenous NADPH or by inhibition of histone deacetylase 3 (HDAC3). Mechanistically, NADPH directly interacts with HDAC3 and interrupts the association between HDAC3 and its co-activator nuclear receptor corepressor 2 (Ncor2; SMRT) or Ncor1, thereby impairing HDAC3 activation. Interestingly, NADPH and the inositol tetraphosphate molecule Ins(1,4,5,6)P4 appear to bind to the same domains on HDAC3, with NADPH having a higher affinity towards HDAC3 than Ins(1,4,5,6)P4. Thus, while Ins(1,4,5,6)P4 promotes formation of the HDAC3-Ncor complex, NADPH inhibits it. Collectively, our findings uncover a previously unidentified and metabolism-independent role of NADPH in controlling epigenetic change and gene expression by acting as an endogenous inhibitor of HDAC3.