BACKGROUND Aberrant histone acetylation has been observed in carcinogenesis and cellular transformation associated with arsenic exposure; however, the molecular mechanisms and cellular outcomes of such changes are poorly understood. OBJECTIVE We investigated the impact of tolerated and toxic arsenic trioxide (As2O3) exposure in human embryonic kidney (HEK293T) and urothelial (UROtsa) cells to characterize the alterations in histone acetylation and gene expression as well as the implications for cellular transformation. METHODS Tolerated and toxic exposures of As2O3 were identified by measurement of cell death, mitochondrial function, cellular proliferation, and anchorage-independent growth. Histone extraction, the MNase sensitivity assay, and immunoblotting were used to assess global histone acetylation levels, and gene promoter-specific interactions were measured by chromatin immunoprecipitation followed by reverse-transcriptase polymerase chain reaction. RESULTS Tolerated and toxic dosages, respectively, were defined as 0.5 μM and 2.5 μM As2O3 in HEK293T cells and 1 μM and 5 μM As2O3 in UROtsa cells. Global hypoacetylation of H3K9 at 72 hr was observed in UROtsa cells following tolerated and toxic exposure. In both cell lines, tolerated exposure alone led to H3K9 hyperacetylation and E2F1 binding at the FOS promoter, which remained elevated after 72 hr, contrary to global H3K9 hypoacetylation. Thus, promoter-specific H3K9 acetylation is a better predictor of cellular transformation than are global histone acetylation patterns. Tolerated exposure resulted in an increased expression of the proto-oncogenes FOS and JUN in both cell lines at 72 hr. CONCLUSION Global H3K9 hypoacetylation and promoter-specific hyperacetylation facilitate E2F1-mediated FOS induction in As2O3-induced cellular transformation.