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The effects of histone acetylation and deacetylation on gene expression
In eukaryotes, DNA is packaged in nucleosomes, which are composed of DNA wrapped around eight histones.
Histones areproteins that can undergo post translation covalent modification, such as acetylation and methylation. In the case of acetylation, histones with lysine residues( which have an amino group at the end of theside chain) can accept acetyl groups.
Normally, the chromatin is in condensed state and this nuclesome structure limits the access of the transcriptional machinery to the DNA, making the DNAunavailable for transcription.
Lysine acetylation seems to have a role in weaking histone-DNA associations (Hong 1993) or nucleosome-nucleosome interactions. This promotes a conformational change in thenucleosome strcuture, which results in the transcription complex having access to the DNA. Studies have shown that acetylated chromatin is associated with states of transcriptional activation, whichresults in gene expression (Hebbes 1988).
Acetylation is a reversible process. Deacetylation promotes the shutting off of gene expression (Kuo, Allis 1998). The repression of gene expression isaccomplished by many factors. When glucose is present, GAL1 transcription is repressed by the Mig 1 protein, which recruits a Tup repressing complex (which contains a histone deacetylase), resulting inthe turning off of gene transcription and gene expression.

References
Hong L., Schroth G.P., Mathhews H.R et al.Studies of the DNA binding properties of histone H4 amino terminus: thermaldenaturation studies reveal that acetylation markedly reduces the binding constant of the H4 “tail” to DNA. (1993) J. Biol. Chem. 268:305–314
Hebbes T.R; Thorne A.W.; Crane-Robinson C. A direct link betweencore histone acetylation and transcriptionally active chromatin. (1988). EMBO J. 7: 1395–1402
Kuo M.-H., Allis C.D. Roles of histone acetyltransferases and deacetylases in gene regulation (1998)...