Previous studies have shown that DNA methyltransferase (Dnmt) 1 is required for maintenance of bulk DNA methylation and is essential for mouse development. However, somatic disruption of DNMT1 in the human cancer cell line HCT116 was not lethal and caused only minor decreases in methylation. Here, we report the identification of a truncated DNMT1 protein, which was generated by the disruption of DNMT1 in HCT116 cells. The truncated protein, which had parts of the regulatory N-terminal domain deleted but preserved the catalytic C-terminal domain, was present at different levels in all DNMT1 single-knockout and DNMT1/DNMT3b double-knockout cell lines tested and retained hemimethylase activity. DNMT1 RNAi resulted in decreased cell viability in WT and knockout cells and further loss of DNA methylation in DNMT1 knockout cells. Furthermore, we observed a delay in methylation after replication and an increase in hemimethylation of specific CpG sites in cells expressing the truncated protein. Remethylation studies after drug-induced hypomethylation suggest a putative role of DNMT1 in the de novo methylation of a subtelomeric repeat, D4Z4, which is lost in cells lacking full-length DNMT1. Our data suggest that DNMT1 might be essential for maintenance of DNA methylation, proliferation, and survival of cancer cells.