The class I histone deacetylases are essential regulators of cell fate decisions in health and disease. While pan- and class-specific HDAC inhibitors are available, these drugs do not allow a comprehensive understanding of individual HDAC function, or the therapeutic potential of isoform-specific targeting. To systematically compare the impact of individual catalytic functions of HDAC1, HDAC2 and HDAC3, we generated human HAP1 cell lines expressing catalytically inactive HDAC enzymes. Using this genetic toolbox we compare the effect of individual HDAC inhibition with the effects of class I specific inhibitors on cell viability, protein acetylation and gene expression. Individual inactivation of HDAC1 or HDAC2 has only mild effects on cell viability, while HDAC3 inactivation or loss results in DNA damage and apoptosis. Inactivation of HDAC1/HDAC2 led to increased acetylation of components of the COREST co-repressor complex, reduced deacetylase activity associated with this complex and derepression of neuronal genes. HDAC3 controls the acetylation of nuclear hormone receptor associated proteins and the expression of nuclear hormone receptor regulated genes. Acetylation of specific histone acetyltransferases and HDACs is sensitive to inactivation of HDAC1/HDAC2. Over a wide range of assays, we determined that in particular HDAC1 or HDAC2 catalytic inactivation mimics class I specific HDAC inhibitors. Importantly, we further demonstrate that catalytic inactivation of HDAC1 or HDAC2 sensitizes cells to specific cancer drugs. In summary, our systematic study revealed isoform-specific roles of HDAC1/2/3 catalytic functions. We suggest that targeted genetic inactivation of particular isoforms effectively mimics pharmacological HDAC inhibition allowing the identification of relevant HDACs as targets for therapeutic intervention.