Expression of microRNA-195 is transactivated by Sp1 but inhibited by histone deacetylase 3 in hepatocellular carcinoma cells.  MiR-195 expression is frequently reduced in various cancers, but its underlying mechanisms remain unknown. To explore whether abnormal transcription contributed to miR-195 downregulation in hepatocellular carcinoma (HCC), we characterized the -2165-bp site upstream of mature miR-195 as transcription start site and the -2.4 to -2.0-kb fragment as the promoter of miR-195 gene. Subsequent investigation showed that deletion of the predicted Sp1 binding site decreased the miR-195 promoter activity; Sp1 silencing significantly reduced the miR-195 promoter activity and the endogenous miR-195 level; Sp1 directly interacted with the miR-195 promoter in vitro and in vivo. These data suggest Sp1 as a transactivator for miR-195 transcription. Interestingly, miR-195 expression was also subjected to epigenetic regulation. Histone deacetylase 3 (HDAC3) could anchor to the miR-195 promoter via interacting with Sp1 and consequently repress the Sp1-mediated miR-195 transactivation by deacetylating histone in HCC cells. Consistently, substantial increase of HDAC3 protein was detected in human HCC tissues and HDAC3 upregulation was significantly correlated with miR-195 downregulation, suggesting that HDAC3 elevation may represent an important cause for miR-195 reduction in HCC. Our findings uncover the mechanisms underlying the transcriptional regulation and expression deregulation of miR-195 in HCC cells and provide new insight into microRNA biogenesis in cancer cells.