Neutral sphingomyelinase-2 (nSMase2) is a key ceramide-producing enzyme in cellular stress responses. While many posttranslational regulators of nSMase2 are known, emerging evidence suggests a more protracted regulation of nSMase2 at the transcriptional level. Previously, we reported that nSMase2 is induced by all-trans retinoic acid (ATRA) in MCF7 cells and implicated nSMase2 in ATRA-induced growth arrest. Here, we further investigated how ATRA regulates nSMase2. We find that ATRA regulates nSMase2 transcriptionally through the retinoic acid receptor-α, but this is independent of previously identified transcriptional regulators of nSMase2 (Sp1, Sp3, Runx2) and is not through increased promoter activity. Epigenetically, the nSMase2 gene is not repressively methylated in MCF7 cells. However, inhibition of histone deacetylases (HDACs) with trichostatin A (TSA) induced nSMase2 comparably to ATRA; furthermore, combined ATRA and TSA treatment was not additive, suggesting ATRA regulates nSMase2 through direct modulation of histone acetylation. Confirming this, the histone acetyltransferases CREB-binding protein and p300 were required for ATRA induction of nSMase2. Finally, use of class-specific HDAC inhibitors suggested that HDAC4 and/or HDAC5 are negative regulators of nSMase2 expression. Collectively, these results identify a novel pathway of nSMase2 regulation and suggest that physiological or pharmacological modulation of histone acetylation can directly affect nSMase2 levels.