Sphingosine-1-phosphate (S1P), a bioactive lipid mediator, is generated from sphingosine by sphingosine kinases (SPHKs) 1 and 2 and is metabolized to ∆2-hexadecenal (∆2-HDE) and ethanolamine phosphate by S1P lyase (S1PL) in mammalian cells. We have recently demonstrated the activation of nuclear SPHK2 and the generation of S1P in the nucleus of lung epithelial cells exposed to Pseudomonas aeruginosa. Here, we have investigated the nuclear localization of S1PL and the role of ∆2-HDE generated from S1P in the nucleus as a modulator of histone deacetylase (HDAC) activity and histone acetylation. Electron micrographs of the nuclear fractions isolated from MLE-12 cells showed nuclei free of ER contamination, and S1PL activity was detected in nuclear fractions isolated from primary lung bronchial epithelial cells and alveolar epithelial MLE-12 cells. Pseudomonas aeruginosa-mediated nuclear ∆2-HDE generation, and H3/H4 histone acetylation was attenuated by S1PL inhibitors in MLE-12 cells and human bronchial epithelial cells. In vitro, the addition of exogenous ∆2-HDE (100-10,000 nM) to lung epithelial cell nuclear preparations inhibited HDAC1/2 activity, and increased acetylation of Histone H3 and H4, whereas similar concentrations of S1P did not show a significant change. In addition, incubation of ∆2-HDE with rHDAC1 generated five different amino acid adducts as detected by LC-MS/MS; the predominant adduct being ∆2-HDE with lysine residues of HDAC1. Together, these data show an important role for the nuclear S1PL-derived ∆2-HDE in the modification of HDAC activity, histone acetylation, and chromatin remodeling in lung epithelial cells.