DNA microarray and genetic studies of Saccharomyces cerevisiae have demonstrated that histone deacetylases (HDACs) are required for transcriptional activation and repression, but the mechanism by which they activate transcription remains poorly understood. We show that two HDACs, RPD3 and HOS2, are required for the activation of DNA damage-inducible genes RNR3 and HUG1. Using mutants specific for the Rpd3L complex, we show that the complex is responsible for regulating RNR3. Furthermore, unlike what was described for the GAL genes, Rpd3L regulates the activation of RNR3 by deacetylating nucleosomes at the promoter, not at the open reading frame. Rpd3 is recruited to the upstream repression sequence of RNR3, which surprisingly does not require Tup1 or Crt1. Chromatin remodeling and TFIID recruitment are largely unaffected in the Deltarpd3/Deltahos2 mutant, but the recruitment of RNA polymerase II is strongly reduced, arguing that Rpd3 and Hos2 regulate later stages in the assembly of the preinitiation complex or facilitate multiple rounds of polymerase recruitment. Furthermore, the histone H4 acetyltransferase Esa1 is required for the activation of RNR3 and HUG1. Thus, reduced or unregulated constitutive histone H4 acetylation is detrimental to promoter activity, suggesting that HDAC-dependent mechanisms are in place to reset promoters to allow high levels of transcription.