Abstract Background Histone deacetylase inhibitors (HDACi) cause histone hyperacetylation and H3K4 hypermethylation in various cell types. They find clinical application as anti-epileptics and chemotherapeutic agents, but the pathways through which they operate remain unclear. Surprisingly, changes in gene expression caused by HDACi are often limited in extent and can be positive or negative. Here we have explored the ability of the clinically important HDACi valproic acid (VPA) to alter histone modification and gene expression, both globally and at specific genes, in mouse embryonic stem (ES) cells. Results Microarray expression analysis of ES cells exposed to VPA (1 mM, 8 h), showed that only 2.4% of genes showed a significant, >1.5-fold transcriptional change. Of these, 33% were down-regulated. There was no correlation between gene expression and VPA-induced changes in histone acetylation or H3K4 methylation at gene promoters, which were usually minimal. In contrast, all Hoxb genes showed increased levels of H3K9ac after exposure to VPA, but much less change in other modifications showing bulk increases. VPA-induced changes were lost within 24 h of inhibitor removal. VPA significantly increased the low transcription of Hoxb4 and Hoxb7, but not other Hoxb genes. Expression of Hoxb genes increased in ES cells lacking functional Polycomb silencing complexes PRC1 and PRC2. Surprisingly, VPA caused no further increase in Hoxb transcription in these cells, except for Hoxb1, whose expression increased several fold. Retinoic acid (RA) increased transcription of all Hoxb genes in differentiating ES cells within 24 h, but thereafter transcription remained the same, increased progressively or fell progressively in a locus-specific manner. Conclusions Hoxb genes in ES cells are unusual in being sensitive to VPA, with effects on both cluster-wide and locus-specific processes. VPA increases H3K9ac at all Hoxb loci but significantly overrides PRC-mediated silencing only at Hoxb4 and Hoxb7. Hoxb1 is the only Hoxb gene that is further up-regulated by VPA in PRC-deficient cells. Our results demonstrate that VPA can exert both cluster-wide and locus-specific effects on Hoxb regulation.