In normal colon, claudin-2 expression is restricted to the crypt bottom containing the undifferentiated and proliferative colonocytes. Claudin-2 expression is also upregulated in colorectal cancer (CRC) and promotes carcinogenesis. However, cellular mechanism/s regulated by increased claudin-2 expression during the CRC and mechanism/s regulating this increase remain poorly understood. Epigenetic mechanisms help regulate expression of cancer-associated genes and inhibition of Histone Deacetylases (HDACs) induces cell cycle arrest and differentiation. Accordingly, based on a comprehensive in vitro and in vivo analysis we here report that Histone Deacetylases regulate claudin-2 expression in causal association with colonocyte dedifferentiation to promote CRC. Detailed differentiation analyses using colon cancer cells demonstrated inverse association between claudin-2 expression and epithelial differentiation. Genetic manipulation studies revealed the causal role of HDAC-4 in regulating claudin-2 expression during this process. Further analysis identified transcriptional regulation as the underlying mechanism, which was dependent on HDAC-4 dependent modulation of the EGFR-ERK1/2 signaling. Accordingly, colon tumors demonstrated marked upregulation of the HDAC-4/ERK1/2/Claudin-2 signaling. Taken together, we demonstrate a novel role for HDAC-4/EGFR/ERK1/2 signaling in regulating claudin-2 expression to modulate colonocyte differentiation. These findings are of clinical significance and highlight epigenetic regulation as potential mechanism to regulate claudin-2 expression during mucosal pathologies including CRC.