p21 loss has been implicated in conferring oncogenic activity to known tumor suppressor gene KLF4 and cancer drug tamoxifen. Regulators of p21, therefore, play critical roles in tumorigenesis. Here, we report that X-linked tumor suppressor FOXP3 is essential for p21 expression in normal epithelia and that lack of FOXP3 is associated with p21 down-regulation in breast cancer samples. A specific FOXP3 binding site in the intron 1 is essential for p21 induction by FOXP3. FOXP3 specifically inhibited binding of histone deacetylase 2 (HDAC2) and HDAC4 to the site and increased local histone H3 acetylation. Short hairpin RNA silencing of either HDAC2 or HDAC4 is sufficient to induce p21 expression. Our data provides a novel mechanism for transcription activation by FOXP3 and a genetic mechanism for lack of p21 in a large proportion of breast cancer. © 2009 American Association for Cancer Research.