The expression of individual chemoreceptor (CR) genes in Caenorhabditis elegans is regulated by multiple environmental and developmental cues, possibly enabling C. elegans to modulate its sensory responses. We had previously shown that KIN-29, a member of the salt-inducible kinase family, acts in a subset of chemosensory neurons to regulate the expression of CR genes, body size and entry into the alternate dauer developmental stage. Here, we show that KIN-29 regulates these processes by phosphorylating the HDA-4 class II histone deacetylase (HDAC) and inhibiting the gene repression functions of HDA-4 and an MEF-2 MADS domain transcription factor. MEF-2 binds directly to the CR gene regulatory sequences, and is required only to repress but not activate CR gene expression. A calcineurin phosphatase antagonizes the KIN-29/MEF-2-regulated pathway to modulate levels of CR gene expression. Our results identify KIN-29 as a new regulator of MEF2/HDAC functions in the nervous system, reveal cell-specific mechanisms of action of this pathway in vivo and demonstrate remarkable complexity in the regulation of CR gene expression in C. elegans.