Abnormal proliferation of vascular smooth muscle cells (VSMCs) occurs in hypertension, atherosclerosis and restenosis after angioplasty, leading to pathophysiological vascular remodeling. As an important growth arrest gene, p21 plays critical roles in vascular remodeling. Regulation of p21 expression by retinoic acid receptor (RAR) and its ligand has important implications for control of pathological vascular remodeling. Nevertheless, the mechanism of RAR-mediated p21 expression in VSMCs remains poorly understood. Here, we show that, under basal conditions, RARα forms a complex with histone deacetylase 2 (HDAC2) and Krüppel-like factor 5 (Klf5) at the p21 promoter to inhibit its expression. Upon RARα agonist stimulation, HDAC2 is phosphorylated by CK2α. Phosphorylation of HDAC2, on the one hand, promotes its dissociation from RARα, thus allowing the liganded-RARα to interact with co-activators; on the other hand, it increases its interaction with Klf5, thus leading to deacetylation of Klf5. Deacetylation of Klf5 facilitates its dissociation from the p21 promoter, relieving its repressive effect on the p21 promoter. Interference with HDAC2 phosphorylation by either CK2α knockdown or the use of phosphorylation-deficient mutant of HDAC2 prevents the dissociation of Klf5 from the p21 promoter and impairs RAR agonist-induced p21 activation. Our results reveal a novel mechanism involving a phosphorylation-deacetylation cascade that functions to remove the basal repression complex from the p21 promoter upon RAR agonist treatment, allowing for optimum agonist-induced p21 expression.