The histone deacetylase inhibitor (HDACi) sodium butyrate promotes differentiation of colon cancer cells as evidenced by induced expression and enzyme activity of the differentiation marker intestinal alkaline phosphatase (ALPi). Screening of a panel of 33 colon cancer cell lines identified cell lines sensitive (42%) and resistant (58%) to butyrate induction of ALP activity. This differential sensitivity was similarly evident following treatment with the structurally distinct HDACi, MS-275. Resistant cell lines were significantly enriched for those harboring the CpG island methylator phenotype (p = 0.036, Chi square test), and resistant cell lines harbored methylation of the ALPi promoter, particularly of a CpG site within a critical KLF/Sp regulatory element required for butyrate induction of ALPi promoter activity. However, butyrate induction of an exogenous ALPi promoter-reporter paralleled up-regulation of endogenous ALPi expression across the cell lines, suggesting the presence or absence of a key transcriptional regulator is the major determinant of ALPi induction. Through microarray profiling of sensitive and resistant cell lines, we identified KLF5 to be both basally more highly expressed as well as preferentially induced by butyrate in sensitive cell lines. KLF5 overexpression induced ALPi promoter-reporter activity in resistant cell lines, KLF5 knockdown attenuated butyrate induction of ALPi expression in sensitive lines, and butyrate selectively enhanced KLF5 binding to the ALPi promoter in sensitive cells. These findings demonstrate that butyrate induction of the cell differentiation marker ALPi is mediated through KLF5 and identifies subsets of colon cancer cell lines responsive and refractory to this effect.