Class IIa histone deacetylases (HDACs) are signal-dependent modulators of transcription with established roles in muscle differentiation and neuronal survival. We show here that in liver, class IIa HDACs (HDAC4, 5, and 7) are phosphorylated and excluded from the nucleus by AMPK family kinases. In response to the fasting hormone glucagon, class IIa HDACs are rapidly dephosphorylated and translocated to the nucleus where they associate with the promoters of gluconeogenic enzymes such as G6Pase. In turn, HDAC4/5 recruit HDAC3, which results in the acute transcriptional induction of these genes via deacetylation and activation of FOXO family transcription factors. Loss of class IIa HDACs in murine liver results in inhibition of FOXO target genes and lowers blood glucose, resulting in increased glycogen storage. Finally, suppression of class IIa HDACs in mouse models of type 2 diabetes ameliorates hyperglycemia, suggesting that inhibitors of class I/II HDACs may be potential therapeutics for metabolic syndrome.