Transcription elongation regulates the expression of many genes, including oncogenes. Histone deacetylase (HDAC) inhibitors (HDACIs) block elongation, suggesting that HDACs are involved in gene activation. To understand this, we analyzed nascent transcription and elongation factor binding genome-wide after perturbation of elongation with small molecule inhibitors. We found that HDACI-mediated repression requires heat shock protein 90 (HSP90) activity. HDACIs promote the association of RNA polymerase II (RNAP2) and negative elongation factor (NELF), a complex stabilized by HSP90, at the same genomic sites. Additionally, HDACIs redistribute bromodomain-containing protein 4 (BRD4), a key elongation factor involved in enhancer activity. BRD4 binds to newly acetylated sites, and its occupancy at promoters and enhancers is reduced. Furthermore, HDACIs reduce enhancer activity, as measured by enhancer RNA production. Therefore, HDACs are required for limiting acetylation in gene bodies and intergenic regions. This facilitates the binding of elongation factors to properly acetylated promoters and enhancers for efficient elongation.