We have investigated the role of DNA methylation in the regulation of the expression of the human tissue transglutaminase gene. Studies on the methylation of the transglutaminase promoter in normal and neoplastic human cells demonstrated that the promoter is methylated in vivo and hypomethylation of the promoter is correlated with constitutive gene expression. Demethylation of the promoter in vivo by treatment of the cells with 5-azacytidine increased transglutaminase expression and hypermethylation of the promoter in vitro suppressed its activity. These studies suggest that alternations in DNA methylation may be one of the mechanisms regulating the tissue-specific expression of the tissue transglutaminase gene.