HDAC1 (histone deacetylase 1) regulates a number of biological processes in cells. Our previous studies revealed that HDAC1 inhibits proliferation of the livers in old mice. We have surprisingly observed that HDAC1 is also increased in young livers proliferating after partial hepatectomy (PH) and in human liver tumors. Increased levels of HDAC1 after PH lead to its interaction with a member of the C/EBP family, C/EBPbeta, which is also elevated after PH. At early time points after PH, the HDAC1-C/EBPbeta complex binds to the C/EBPalpha promoter and represses expression of C/EBPalpha. A detailed analysis of the role of HDAC1 and C/EBPbeta proteins in the regulation of C/EBPalpha promoter showed that, whereas C/EBPbeta alone activates the promoter, HDAC1 represses the promoter in a C/EBPbeta-dependent manner. The inhibition of HDAC1 in the livers of young mice inhibits liver proliferation after PH, which is associated with high levels of C/EBPalpha. Consistent with the positive role of HDAC1-C/EBPbeta complexes in liver proliferation, we have found that the CUGBP1-HDAC1-C/EBPbeta pathway is activated in human tumor liver samples, suggesting that HDAC1-C/EBPbeta complexes are involved in the development of liver tumors. The causal role of the CUGBP1-HDAC1 pathway in liver proliferation was examined in CUGBP1 transgenic mice, which display high levels of the CUGBP1-eIF2 complex. We have demonstrated that elevation of the HDAC1-C/EBPbeta complexes in CUGBP1 transgenic mice reduces expression of C/EBPalpha and increases the rate of liver proliferation. Thus, these studies have identified a new pathway that promotes liver proliferation in young mice and might contribute to the malignant transformations in the liver.