The class-I histone deacetylases (HDACs) HDAC1 and HDAC2 belong to a family of 11 zinc-dependent human HDACs and are overexpressed in many cancers. Inhibitors of these HDACs now in clinical trials show activity against several types of cancers. This review is focused on recent advances in both clinical and preclinical efforts to understand the basis for the actions of HDACis, with emphasis on implications for rational combinations with conventional or other targeted agents. We will address new perspectives on the molecular mechanisms by which HDACs act and how these actions relate to cancer. We will also review new evidence showing that HDACs are direct intracellular targets of the potent sphingolipid mediator S1P, the first identified endogenous nuclear regulator of these enzymes, linking sphingolipid metabolism in the nucleus to remodeling of chromatin and epigenetic regulation of gene expression. Understanding how endogenous molecules regulate HDAC activity in vivo may facilitate the search for safer and more effective anticancer drugs capable of interfering with HDAC functions in a highly specific manner.