Chronic kidney disease (CKD) is characterized by kidney inflammation and fibrosis. However, the precise mechanisms leading to kidney inflammation and fibrosis are poorly understood. Since histone deacetylase is involved in inflammation and fibrosis in other tissues, we examined the role of histone deacetylase 3 (HDAC3) in the regulation of inflammation and kidney fibrosis. HDAC3 is induced in the kidneys of animal models of CKD but mice with conditional HDAC3 deletion exhibit significantly reduced fibrosis in the kidneys compared with control mice. The expression of proinflammatory and profibrotic genes was significantly increased in the fibrotic kidneys of control mice, which was impaired in mice with HDAC3 deletion. Genetic deletion or pharmacological inhibition of HDAC3 reduced the expression of proinflammatory genes in cultured monocytes/macrophages. Mechanistically, HDAC3 deacetylates Lys122 of NF-κB p65 subunit turning on transcription. RGFP966, a selective HDAC3 inhibitor, reduced fibrosis in cells and in animal models by blocking NF-κB p65 binding to κB-containing DNA sequences. Thus, our study identified HDAC3 as a critical regulator of inflammation and fibrosis of the kidney through deacetylation of NF-κB unlocking its transcriptional activity. Hence, targeting HDAC3 could serve as a novel therapeutic strategy for CKD.