An important step in transcriptional regulation by corepressors N-CoR and SMRT is the formation of a stable and active histone deacetylase 3 (HDAC3)-containing complex. Although N-CoR and SMRT are thought to bind HDAC3 competitively, multiple studies have shown that they do not interfere with the function of each other. How this functional independence is sustained under the competitive interaction is unclear. Here, we show that the coupling of corepressor expression with HDAC3 degradation allows cells to maintain a stable level of uncomplexed HDAC3, thereby preventing mutual interference in the assembly of N-CoR and SMRT complexes. The free uncomplexed HDAC3 is highly unstable. Unexpectedly, the rate of HDAC3 degradation is inversely correlated with the expression level of corepressors. Our results indicate that reducing one corepressor accelerates HDAC3 clearance, thus preventing an increase in complex formation between HDAC3 and the other corepressor. In addition, this study also indicates that the formation of a stable and active HDAC3-corepressor complex is a stepwise process in which the C terminus of HDAC3 plays a critical role at late steps of the assembly process.