Histone deacetylases such as human HDAC1 and yeast RPD3 are trichostatin A (TSA)-sensitive enzymes that are members of large, multiprotein complexes. These contain specialized subunits that help target the catalytic protein to histones at the appropriate DNA regulatory element, where the enzyme represses transcription. To date, no deacetylase catalytic subunits have been shown to have intrinsic activity, suggesting that noncatalytic subunits of the deacetylase complex are required for their enzymatic function. In this paper we describe a novel yeast histone deacetylase HOS3 that is relatively insensitive to the histone deacetylase inhibitor TSA, forms a homodimer when expressed ectopically both in yeast and Escherichia coli, and has intrinsic activity when produced in the bacterium. Most HOS3 protein can be found associated with a larger complex in partially purified yeast nuclear extracts, arguing that the HOS3 homodimer may be dissociated from a very large nuclear structure during purification. We also demonstrate, using a combination of mass spectrometry, tandem mass spectrometry, and proteolytic digestion, that recombinant HOS3 has a distinct specificity in vitro for histone H4 sites K5 and K8, H3 sites K14 and K23, H2A site K7, and H2B site K11. We propose that while factors that interact with HOS3 may sequester the catalytic subunit at specific cellular sites, they are not required for HOS3 histone deacetylase activity.