The class I histone deacetylases HDAC1 and HDAC2 are highly conserved except for their C-terminal domain, but are presumed to have distinct functions in various tissues. We investigated the division of roles between HDAC1 and HDAC2 for the control of transcription and recombination at the immunoglobulin (Ig) gene in DT40. HDAC1(-/-) knock-out cells showed an increased incidence of gene conversion and of deletion/insertion events at the Ig light chain locus (IgL), but not at the heavy chain locus (IgH). Irrespective of recombinational activity, the transcription levels at IgL and IgH were decreased in HDAC1(-/-) cells, while other genes actively transcribed in B cells were slightly up-regulated compared to the levels in wild-type cells. These observations were strikingly different from the previously reported effects in HDAC2(-/-) cells, which showed a significant enhancement of transcriptional and recombinational activities at both IgL and IgH. Swapping experiments of the C-terminal unconserved domain of HDAC2 with its HDAC1 counterpart by gene knock-in demonstrated that this domain was not responsible for the phenotypic differences of HDAC1(-/-) and HDAC2(-/-). This suggests that other features such as modifications in the N-terminal catalytic domain could be important to determine the functional differences of these enzymes despite their structural similarities.