During development from the fertilized egg to a multicellular organism, cell fate decisions have to be taken and cell lineage or tissue-specific gene expression patterns are created and maintained. These alterations in gene expression occur in the context of chromatin structure and are controlled by chromatin modifying enzymes. Gene disruption studies in different genetic systems have shown an essential role of various histone deacetylases (HDACs) during early development and cellular differentiation. In this review, we focus on the functions of the class I enzymes HDAC1 and HDAC2 during development in different organisms and summarise the current knowledge about their involvement in neurogenesis, myogenesis, haematopoiesis and epithelial cell differentiation.