The major DNA cytosine methyltransferase isoform in mouse erythroleukemia cells, Dnmt1, exhibits potent dead-end inhibition with a single-stranded nucleic acid by binding to an allosteric site on the enzyme. The previously reported substrate inhibition with double-stranded substrates also involves binding to an allosteric site. Thus, both forms of inhibition involve ternary enzyme-DNA-DNA complexes. The inhibition potency of the single-stranded nucleic acid is determined by the sequence, length, and most appreciably the presence of a single 5-methylcytosine residue. A single-stranded phosphorothioate derivative inhibits DNA methylation activity in nuclear extracts. Mouse erythroleukemia cells treated with the phosphorothioate inhibitor show a significant decrease in global genomic methylation levels. Inhibitor treatment of human colon cancer cells causes demethylation of the p16 tumor suppressor gene and subsequent p16 re-expression. Allosteric inhibitors of mammalian DNA cytosine methyltransferases, representing a new class of molecules with potential therapeutic applications, may be used to elucidate novel epigenetic mechanisms that control development.