Histone acetylation and deacetylation play an important role in the modification of chromatin structure and regulation of gene expression in eukaryotes. Chromatin acetylation status is modulated antagonistically by histone acetyltransferases and histone deacetylases (HDACs). In this study, we characterized the function of histone deacetylase701 (HDT701), a member of the plant-specific HD2 subfamily of HDACs, in rice (Oryza sativa) innate immunity. Transcription of HDT701 is increased in the compatible reaction and decreased in the incompatible reaction after infection by the fungal pathogen Magnaporthe oryzae. Overexpression of HDT701 in transgenic rice leads to decreased levels of histone H4 acetylation and enhanced susceptibility to the rice pathogens M. oryzae and Xanthomonas oryzae pv oryzae (Xoo). By contrast, silencing of HDT701 in transgenic rice causes elevated levels of histone H4 acetylation and elevated transcription of pattern recognition receptor (PRR) and defense-related genes, increased generation of reactive oxygen species after pathogen-associated molecular pattern elicitor treatment, as well as enhanced resistance to both M. oryzae and Xoo. We also found that HDT701 can bind to defense-related genes to regulate their expression. Taken together, these results demonstrate that HDT701 negatively regulates innate immunity by modulating the levels of histone H4 acetylation of PRR and defense-related genes in rice.