Transcriptional repression by Mad-Max heterodimers requires interaction of Mad with the corepressors mSin3A/B. Sin3p, the S. cerevisiae homolog of mSin3, functions in the same pathway as Rpd3p, a protein related to two recently identified mammalian histone deacetylases, HDAC1 and HDAC2. Here, we demonstrate that mSin3A and HDAC1/2 are associated in vivo. HDAC2 binding requires a conserved region of mSin3A capable of mediating transcriptional repression. In addition, Mad1 forms a complex with mSin3 and HDAC2 that contains histone deacetylase activity. Trichostatin A, an inhibitor of histone deacetylases, abolishes Mad repression. We propose that Mad-Max functions by recruiting the mSin3-HDAC corepressor complex that deacetylates nucleosomal histones, producing alterations in chromatin structure that block transcription.