Small-molecule inhibitors and microRNAs (miRNAs) are two newly emerging classes of tools for optimizing induced pluripotent stem cell (iPSC) generation. We report here that sodium butyrate (NaB), a small-molecule inhibitor of histone deacetylases (HDACs), upregulates transcriptional levels of the miR-302/367 cluster by enhancing Oct4 transcriptional activity at the miR-302/367 cluster promoter. NaB does not affect the OCT4 DNA-binding domain; instead it enhances transactivity of the OCT4 transactivation domains. We elucidate that OCT4 transcriptional activity is usually dampened by its associated HDACs in cells and can be derepressed by NaB by impairing the interaction between Oct4 and HDACs, which leads to an elevated expression of the miR-302/367 cluster. Our new findings suggest a novel molecular mechanism for NaB in promoting somatic cell reprogramming via the miR-302/367 cluster.