Mutations in MECP2 cause the neurodevelopmental disorder Rett syndrome (RTT). The RTT missense MECP2R306C mutation prevents MeCP2 from interacting with the NCoR/histone deacetylase 3 (HDAC3) complex; however, the neuronal function of HDAC3 is incompletely understood. We found that neuronal deletion of Hdac3 in mice elicited abnormal locomotor coordination, sociability and cognition. Transcriptional and chromatin profiling revealed that HDAC3 positively regulated a subset of genes and was recruited to active gene promoters via MeCP2. HDAC3-associated promoters were enriched for the FOXO transcription factors, and FOXO acetylation was elevated in Hdac3 knockout (KO) and Mecp2 KO neurons. Human RTT-patient-derived MECP2R306C neural progenitor cells had deficits in HDAC3 and FOXO recruitment and gene expression. Gene editing of MECP2R306C cells to generate isogenic controls rescued HDAC3-FOXO-mediated impairments in gene expression. Our data suggest that HDAC3 interaction with MeCP2 positively regulates a subset of neuronal genes through FOXO deacetylation, and disruption of HDAC3 contributes to cognitive and social impairment.