The zinc finger transcription factor Krüppel-like factor 4 (KLF4) has been implicated in vascular smooth muscle cell differentiation induced by all-trans retinoic acid (ATRA). However, the molecular mechanism whereby ATRA regulates KLF4 activity is still poorly understood. Here, we show that ATRA-induced histone deacetylase 2 (HDAC2) phosphorylation at Ser424 in VSMCs and inhibited the interaction of HDAC2 with KLF4. Inhibiting JNK by JNK inhibitor SP600125 or knockdown of JNK by JNK siRNA abrogated ATRA-induced HDAC2 phosphorylation and reversed ATRA-induced suppression of the interaction of HDAC2 with KLF4. We further demonstrated that HDAC2 directly deacetylated KLF4, and that KLF4 acetylation and binding activity of KLF4 to the SM22alpha promoter were significantly increased in ATRA-treated VSMCs. Collectively, our results indicate that ATRA induces HDAC2 phosphorylation mediated by JNK signaling, and thus causes HDAC2 dissociation from KLF4, subsequently leading to the increase in KLF4 acetylation.