Although it has been well established that insoluble nickel compounds are potent carcinogens and soluble nickel compounds are less potent, the mechanisms remain unclear. Nickel compounds are weakly mutagenic, but cause epigenetic effects in cells. Previous studies have shown that insoluble nickel compounds enter cells by phagocytosis and silence gene expression, but the entry of soluble nickel compounds and their effects on gene silencing have not been well studied. Here, we have demonstrated, using a dye that fluoresces when nickel ions bind, that soluble nickel compounds were taken up by cells. Nickel ions localized initially in the cytoplasm, but later entered the nucleus and eventually silenced a transgene. In addition, we described three major changes in histone modification of cells exposed to soluble nickel compounds: (i) loss of acetylation of H2A, H2B, H3 and H4; (ii) increases of H3K9 dimethylation; and (iii) substantial increases of the ubiquitination of H2A and H2B. These effects were observed at nickel exposure conditions that had minimum effects on cell cytotoxicity. Moreover, we demonstrated that nickel-induced transgene silencing was associated with similar changes of histone modifications in their nuclesomes. This study is the first to show that nickel compounds increase histone ubiquitination in cells. These new findings will further our understanding of the epigenetic mechanisms of nickel-mediated carcinogenesis.