Mammalian gene expression is activated by histone acetylation, which is reversed by histone deacetylases (HDACs) whose enzymatic functions are pharmaceutically targeted by HDAC inhibitors for cancer treatment and many other diseases. In addition to activating gene expression as predicted from their effects on the epigenome, HDAC inhibitors also silence transcription which is hard to understand based on current dogma. HDAC3 is particularly interesting because its enzyme activity requires interaction with Nuclear Receptor Corepressors (NCoR1/2). Remarkably, although global loss of HDAC3 is lethal owing to gastrulation defects, mice with mutations in the deacetylase-activating domains of both NCoR1 and NCoR2 are born in expected Mendelian ratios, despite lacking detectable HDAC3 enzymatic activity. These observations underlined the objective of this study, which is to elucidate the regulatory and physiological importance of HDAC3 non-enzymatic functions. The first aim of the study focuses on characterizing HDAC3 deacetylase-independent versus deacetylase-dependent regulomes in the context of murine bone-marrow derived macrophages, employing a HDAC3 point mutation (Y298F) in the enzyme’s active site that disrupts its potent deacetylase activity. HDAC3 has been shown to be required for endotoxin (LPS)-stimulated gene activation in macrophages, but the underlying mechanism is unknown. We found that HDAC3 enzyme-independent function was indeed crucial for such activation, and that HDAC3 enzymatic activity was differentially engaged at distinct genomic regions, depending on its interacting partners. In the second aim of the study, the physiological relevance of HDAC3 enzyme activity in priming the innate immune system in response to endotoxic shock was examined, using both genetic and pharmacological blockage of HDAC3 enzymatic activity. Mice with macrophage-specific deletion HDAC3 produced significantly lower level of circulating inflammatory cytokines, enhancing their survival after being exposed to endotoxin. By contrast, animals harboring enzyme-dead HDAC3 hyper-activated the production of inflammatory cytokines that were detrimental in the endotoxin response. Taken together, these results place HDAC3 as the central integrator of external pathological stimulus to aid the immune system in mounting a well-balanced immunological response to ensure survival of the organism. This work advances our understanding of HDAC3 in transcriptional regulation as a dichotomous activator and repressor, while highlighting the under-appreciated physiological relevance of its deacetylase-independent function.