CpG methylation is maintained in daughter chromatids by the action of DNA methyltransferase at the replication fork. An opportunity exists for transcription factors at replication forks to bind their cognate sequences and thereby prevent remethylation by DNA methyltransferase. To test this hypothesis, we injected a linearized, methylated, and partially single-stranded reporter plasmid into the nuclei of Xenopus oocytes and followed changes in the transcriptional activity after DNA replication. We find that dependent on Gal4-VP16, the action of DNA methyltransferase, and replication-coupled chromatin assembly DNA replication provides a window of time in which regulatory factors can activate or repress gene activity. Demethylation in the promoter region near the GAL4 binding sites of the newly synthesized DNA did not occur even though the Gal4 binding sites were occupied and transcription was activated. We conclude that "passive" demethylation at the replication fork is not simply dependent on the presence of DNA binding transcriptional activators.