Histone acetylation is an important epigenetic mechanism for the control of eukaryotic transcription. The histone deacetylase 1 (HDAC1) gene has been implicated in controlling the transcription of core cell cycle regulators, but the in vivo role of HDACs in cell cycle regulation is still poorly understood. Loss of HDAC1 activity causes underproliferation in several contexts during vertebrate development. In contrast, we show here that HDAC1 has the opposite effect in the zebrafish visual system, where loss of HDAC1 activity leads to failure of cells to exit the cell cycle in the retina and in the optic stalk. The effect of HDAC1 on cell cycle exit is cell-autonomous, and loss of HDAC1 in the retina leads to up-regulation of cyclin D and E transcripts. These results demonstrate that the in vivo role of HDAC1 in regulating cell cycle progression is region-specific, as HDAC1 promotes cell cycle exit in the retina but stimulates proliferation in other cellular contexts.