The enzyme‐catalyzed acetylation of the N‐terminal tail domains of core histones provides a rich potential source of epigenetic information. This may be used both to mediate transient changes in transcription, through modification of promoter‐proximal nucleosomes, and for the longer‐term maintenance and modulation of patterns of gene expression. The latter may be achieved by setting specific patterns of histone acetylation, perhaps involving acetylation of particular lysine residues, across relatively large chromatin domains. The histone acetylating and deacetylating enzymes (HATs and HDACs, respectively) can be targeted to specific regions of the genome and show varying degrees of substrate specificity, properties that are consistent with a role in maintaining a dynamic, acetylation‐based epigenetic code. The code may be read (ie. exert a functional effect) either through non‐histone proteins that bind in an acetylation‐dependent manner, or through direct effects on chromatin structure. Recent evidence raises the interesting possibility that an acetylation‐based code may operate through both mitosis and meiosis, providing a possible mechanism for germ‐line transmission of epigenetic changes. BioEssays 22:836–845, 2000. © 2000 John Wiley & Sons, Inc.