This paper tests the hypothesis that DNA methyltransferase plays a causal role in cellular transformation induced by SV40 T antigen. We show that T antigen expression results in elevation of DNA methyltransferase (MeTase) mRNA, DNA MeTase protein levels, and global genomic DNA methylation. A T antigen mutant that has lost the ability to bind pRb does not induce DNA MeTase. This up-regulation of DNA MeTase by T antigen occurs mainly at the posttranscriptional level by altering mRNA stability. Inhibition of DNA MeTase by antisense oligonucleotide inhibitors results in inhibition of induction of cellular transformation by T antigen as determined by a transient transfection and soft agar assay. These results suggest that elevation of DNA MeTase is an essential component of the oncogenic program induced by T antigen.