Recent studies have demonstrated that embryonic stem cell-like induced pluripotent stem (iPS) cells can be generated by enforced expression of defined transcription factors. The fact that cell fate change is accompanied by changes in epigenetic modifications prompted us to investigate whether chemicals known to modulate epigenetic regulators are capable of enhancing the efficiency of iPS cell generation. Here, we report that butyrate, a natural small fatty acid and histone deacetylase inhibitor, significantly increases the efficiency of mouse iPS cell generation using the transcription factors Oct4, Sox2, Klf4, and c-Myc. We show that butyrate not only changes the reprogramming dynamics, but also increases the ratio of iPS cell colonies to total colonies by reducing the frequency of partially reprogrammed cells and transformed cells. Detailed analysis reveals that the effect of butyrate on reprogramming appears to be mediated by c-Myc and occurs during an early stage of reprogramming. Genome-wide gene expression analysis reveals up-regulation of ES cell-enriched genes when mouse embryonic fibroblasts are treated with butyrate during reprogramming. Thus, our study identifies butyrate as a chemical factor capable of promoting iPS cell generation.