Histone deacetylases (HDACs) play important roles in transcriptional regulation and pathogenesis of cancer. Thus, HDAC inhibitors are candidate drugs for differentiation therapy of cancer. Here, we show that the well-tolerated antiepileptic drug valproic acid is a powerful HDAC inhibitor. Valproic acid relieves HDAC-dependent transcriptional repression and causes hyperacetylation of histones in cultured cells and in vivo. Valproic acid inhibits HDAC activity in vitro, most probably by binding to the catalytic center of HDACs. Most importantly, valproic acid induces differentiation of carcinoma cells, transformed hematopoietic progenitor cells and leukemic blasts from acute myeloid leukemia patients. More over, tumor growth and metastasis formation are significantly reduced in animal experiments. Therefore, valproic acid might serve as an effective drug for cancer therapy.