Cardiovascular disease continues to be the leading cause of morbidity and mortality worldwide with an estimated 17 million annual deaths. A majority of cases are attributed to disease affecting the vascular system including arterial, venous and lymphatic vessels. Despite progress in understanding the molecular bases of vascular development and disease, the role of chromatin modifying enzymes in vascular processes remains ill defined. Here we show that the histone-modifying enzyme Hdac3 is a critical regulator of lymphatic vascular development. Endothelial specific loss of Hdac3 in mice affects the development of lymphovenous and lymphatic valves resulting in aberrant blood lymph separation, lymphedema and complete lethality. We demonstrate that Hdac3 functions in a flow responsive manner to regulate the expression of Gata2, a transcription factor essential for lymphatic valve development. In response to flow, transcription factors Tal1, Ets1/2 and Gata2 recruit Hdac3 to an evolutionarily conserved intragenic enhancer of Gata2 gene. In turn, Hdac3 recruits p300, a histone acetyl transferase, to render activation of the Gata2 enhancer, and thus promotes Gata2 transcription. Together, our findings demonstrate the molecular basis by which cell extrinsic and intrinsic cues cooperate to regulate lymphatic development.