Epigenetic alterations, including gain or loss of DNA methylation, are a hallmark of nearly every malignancy. Changes in DNA methylation can impact expression of cancer-related genes including apoptosis regulators and tumor suppressors. Because such epigenetic changes are reversible, they are being aggressively investigated as potential therapeutic targets. Here we use the Emu-TCL1 transgenic mouse model of chronic lymphocytic leukemia (CLL) to determine the timing and patterns of aberrant DNA methylation, and to investigate the mechanisms that lead to aberrant DNA methylation. We show that CLL cells from Emu-TCL1 mice at various stages recapitulate epigenetic alterations seen in human CLL. Aberrant methylation of promoter sequences is observed as early as 3 months of age in these animals, well before disease onset. Abnormally methylated promoter regions include binding sites for the transcription factor FOXD3. We show that loss of Foxd3 expression due to an NF-kappaB p50/p50:HDAC1 repressor complex occurs in TCL1-positive B cells before methylation. Therefore, specific transcriptional repression is an early event leading to epigenetic silencing of target genes in murine and human CLL. These results provide strong rationale for the development of strategies to target NF-kappaB components in CLL and potentially other B-cell malignancies.