Histone deacetylases (HDACs) are a family of enzymes that deacetylate histones as well as a large number of other nuclear, cytoplasmic, and mitochondrial proteins. The deacetylation of histones transforms chromatin to a transcriptionally repressed state, whereas deacetylation of other cellular proteins regulates their functional activity through modulation of subcellular location, their interaction with other proteins, and in the case of transcription factors, their DNA-binding ability. A compelling body of evidence derived from the utilization of pharmacological inhibitors indicates that histone deacetylases are important regulators of brain development as well as the pathogenesis of neurodegenerative diseases. However, because most of the pharmacological inhibitors used are non-selective with regard to the different members of the HDAC family, the significance of individual HDAC proteins to brain development and degeneration has been difficult to delineate. This review focuses on HDAC3. Experiments conducted using more recently developed isoform selective inhibitors and molecular genetic approaches demonstrate that HDAC3 regulates different steps of neurodevelopment, including neurogenesis, gliogenesis, glial cell fate determination, and the myelination of oligodendrocytes and Schwann cells. However, specific posttranslational modifications and alterations in its binding partners transform HDAC3 from a protein that is beneficial to the brain to one that is neurotoxic. The role of HDAC3 in the promotion of neurodegeneration and the inhibition of recovery after nerve injury is reviewed. The role of HDAC3 in the regulation of memory in the adult and aging brain is also described. Impact statement Brain development and degeneration are highly complex processes that are regulated by a large number of molecules and signaling pathways the identities of which are being unraveled. Accumulating evidence points to histone deacetylases and epigenetic mechanisms as being important regulators of these processes. In this review, we describe that histone deacetylase-3 (HDAC3) is a particularly crucial regulator of both neurodevelopment and neurodegeneration. In addition, HDAC3 regulates memory formation, synaptic plasticity, and the cognitive impairment associated with normal aging. Understanding how HDAC3 functions contributes to the normal development and functioning of the brain while also promoting neurodegeneration could lead to the development of therapeutic approaches for neurodevelopmental, neuropsychiatric, and neurodegenerative disorders.