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Histone deacetylases (HDACs) are negative regulators of gene expression and have been implicated in tumorigenesis and tumor progression. Therefore, HDACs are promising targets for anti-tumor drugs. However, the relevant isoforms of the 18 members encompassing HDAC family have not been identified. Studies utilizing either gene targeting or knockdown approaches reveal both specific and redundant functions of the closely related class I deacetylases HDAC1 and HDAC2 in the control of proliferation and differentiation. Combined ablation of HDAC1 and HDAC2 in different cell types led to a severe proliferation defects or enhanced apoptosis supporting the idea that both enzymes are relevant targets for tumor therapy. In a recent study on the role of HDAC1 in teratoma formation we have reported a novel and surprising function of HDAC1 in tumorigenesis. In this tumor model HDAC1 attenuates proliferation during teratoma formation. In the present work we discuss new findings on redundant and unique functions of HDAC1 and HDAC2 as regulators of proliferation and tumorigenesis and potential implications for applications of HDAC inhibitors as therapeutic drugs.