Human sirtuin isoform 2 (SIRT2) is an NAD+-dependent enzyme that functions as a lysine deacetylase and defatty-acylase. Here, we report that SIRT2 readily dimerizes in solution and in cells and that dimerization affects its ability to remove different acyl modifications from substrates. Dimerization of recombinant SIRT2 was revealed with analytical size exclusion chromatography and chemical cross-linking. Dimerized SIRT2 dissociates into monomers upon binding long fatty acylated substrates (decanoyl-, dodecanoyl-, and myristoyl-lysine). However, we did not observe dissociation of dimeric SIRT2 in the presence of acetyl-lysine. Analysis of X-ray crystal structures led us to discover a SIRT2 double mutant (Q142A/E340A) that is impaired in its ability to dimerize, which was confirmed with chemical cross-linking and in cells with a split-GFP approach. In enzyme assays, the SIRT2(Q142A/E340A) mutant had normal defatty-acylase activity and impaired deacetylase activity compared with the wild-type protein. These results indicate that dimerization is essential for optimal SIRT2 function as a deacetylase. Moreover, we show that SIRT2 dimers can be dissociated by a deacetylase and defatty-acylase inhibitor, ascorbyl palmitate. Our finding that its oligomeric state can affect the acyl substrate selectivity of SIRT2 is a novel mode of activity regulation by the enzyme that can be altered genetically or pharmacologically.