Eukaryotic DNA is packaged into a nucleoprotein structure known as chromatin, which is comprised of DNA, histones, and nonhistone proteins. Chromatin structure is highly dynamic, and can shift from a transcriptionally inactive state to an active form in response to intra- and extracellular signals. A major factor in chromatin architecture is the covalent modification of histones through the addition of chemical moieties, such as acetyl, methyl, ubiquitin, and phosphate groups. The acetylation of the amino-terminal tails of histones is a process that is highly conserved in eukaryotes, and was one of the earliest histone modifications characterized. Since its identification in 1964, a large body of evidence has accumulated demonstrating that histone acetylation plays an important role in transcription. Despite our ever-growing understanding of the nuclear processes involved in nucleosome acetylation, however, the exact biochemical mechanisms underlying the downstream effects of histone acetylation have yet to be fully elucidated. To date, histone acetylation has been proposed to function in 2 nonmutually exclusive manners: by directly altering chromatin structure, and by acting as a molecular tag for the recruitment of chromatin-modifying complexes. Here, we discuss recent research focusing on these 2 potential roles of histone acetylation and clarify what we actually know about the function of this modification.