Depression involves plasticity of brain reward neurons, although the mechanisms and behavioral relevance are unknown. Transcriptional profiling of nucleus accumbens (NAc) for RhoGTPase related genes, known regulators of synaptic structure, following chronic social defeat stress, revealed a long-term reduction in Rac1 transcription. This was marked by a repressive chromatin state surrounding its proximal promoter. Inhibition of class 1 HDACs with MS-275 rescued both decreased Rac1 transcription and social avoidance behavior. A similar repressive chromatin state was found surrounding the Rac1 promoter in human postmortem NAc from depressed subjects, which corresponded with reduced Rac1 transcription. We show Rac1 is necessary and sufficient for social avoidance and anhedonia, and the formation of stubby excitatory spines by redistributing synaptic cofilin, an actin severing protein downstream of Rac1. Our data identifies epigenetic regulation of Rac1 in NAc as a bona fide disease mechanism in depression and reveals a functional role in regulating stress-related behaviors.