Cell fusion occurs when several cells combine to form a multinuclear aggregate (syncytium). In human placenta, a syncytialized trophoblast (syncytiotrophoblast) layer forms the primary interface between maternal and fetal tissue, facilitates nutrient and gas exchange, and produces hormones vital for pregnancy. Syncytiotrophoblast development occurs by differentiation of underlying progenitor cells called cytotrophoblasts, which then fuse into the syncytiotrophoblast layer. Differentiation is associated with chromatin remodeling and specific changes in gene expression mediated, at least in part, by histone acetylation. However, the epigenetic regulation of human cytotrophoblast differentiation and fusion is poorly understood. In this study, we found that human syncytiotrophoblast development was associated with deacetylation of multiple core histone residues. Chromatin immunoprecipitation sequencing revealed chromosomal regions that exhibit dynamic alterations in histone H3 acetylation during differentiation. These include regions containing genes classically associated with cytotrophoblast differentiation (TEAD4, TP63, OVOL1, CGB), as well as near genes with novel regulatory roles in trophoblast development and function, such as LHX4 and SYDE1. Prevention of histone deacetylation using both pharmacological and genetic approaches inhibited trophoblast fusion, supporting a critical role of this process for trophoblast differentiation. Finally, we identified the histone deacetylases (HDACs) HDAC1 and HDAC2 as the critical mediators driving cytotrophoblast differentiation. Collectively, these findings provide novel insights into the epigenetic mechanisms underlying trophoblast fusion during human placental development.