Differentiation of skeletal muscle cells is accompanied by drastic changes in gene expression programs that depend on activation and repression of genes at defined time points. Here we identify the serine/threonine kinase homeodomain-interacting protein kinase 2 (HIPK2) as a corepressor that inhibits myocyte enhancer factor 2 (MEF2)-dependent gene expression in undifferentiated myoblasts. Downregulation of HIPK2 expression by shRNAs results in elevated expression of muscle-specific genes, whereas overexpression of the kinase dampens transcription of these genes. HIPK2 is constitutively associated with a multi-protein complex containing histone deacetylase (HDAC)3 and HDAC4 that serves to silence MEF2C-dependent transcription in undifferentiated myoblasts. HIPK2 interferes with gene expression on phosphorylation and HDAC3-dependent deacetylation of MEF2C. Ongoing muscle differentiation is accompanied by elevated caspase activity, which results in caspase-mediated cleavage of HIPK2 following aspartic acids 916 and 977 and the generation of a C-terminally truncated HIPK2 protein. The short form of the kinase loses its affinity to the repressive multi-protein complex and its ability to bind HDAC3 and HDAC4, thus alleviating its repressive function for expression of muscle genes. This study identifies HIPK2 as a further protein that determines the threshold and kinetics of gene expression in proliferating myoblasts and during the initial steps of myogenesis.