Promyelocytic leukemia protein (PML) nuclear bodies (NBs) are dynamic subnuclear compartments that play roles in several cellular processes, including apoptosis, transcriptional regulation, and DNA repair. Histone deacetylase (HDAC) 7 is a potent corepressor that inhibits transcription by myocyte enhancer factor 2 (MEF2) transcription factors. We show here that endogenous HDAC7 and PML interact and partially colocalize in PML NBs. Tumor necrosis factor (TNF)-alpha treatment recruits HDAC7 to PML NBs and enhances association of HDAC7 with PML in human umbilical vein endothelial cells. Consequently, TNF-alpha promotes dissociation of HDAC7 from MEF2 transcription factors and the promoters of MEF2 target genes such as matrix metalloproteinase (MMP)-10, leading to accumulation of MMP-10 mRNA. Conversely, knockdown of PML enhances the association between HDAC7 and MEF2 and decreases MMP-10 mRNA accumulation. Accordingly, ectopic expression of PML recruits HDAC7 to PML NBs and leads to activation of MEF2 reporter activity. Notably, small interfering RNA knockdown of PML decreases basal and TNF-alpha-induced MMP-10 mRNA accumulation. Our results reveal a novel mechanism by which PML sequesters HDAC7 to relieve repression and up-regulate gene expression.