We recently identified that DNA methylation of the G0S2 gene was significantly more frequent in squamous lung cancer than in non-squamous lung cancer. However, the significance of G0S2 methylation levels on cancer cells is not yet known. We investigated the effect of G0S2 methylation levels on cell growth, mRNA expression, and chromatin structure using squamous lung cancer cell lines and normal human bronchial epithelial cells. DNA methylation and mRNA expression of G0S2 were inversely correlated, and in one of the squamous lung cancer cell lines, LC-1 sq, G0S2 was completely methylated and suppressed. Overexpression of G0S2 in LC-1 sq did not show growth arrest or apoptosis. The G0S2 gene has been reported to be a target gene of all-trans retinoic acid and peroxisome proliferator-activated receptor agonists. We treated LC-1 sq with 5-Aza-2'-deoxycytidine, Trichostatin A, all-trans retinoic acid, Wy 14643, or Pioglitazone either alone or in combination. Only 5-Aza-2'-deoxycytidine restored mRNA expression of G0S2. Chromatin immunoprecipitation revealed that histone H3 lysine 9 was methylated regardless of DNA methylation or mRNA expression. In summary, mRNA expression of G0S2 was regulated mainly by DNA methylation in squamous lung cancer cell lines. When the G0S2 gene was methylated, nuclear receptor agonists could not restore mRNA expression of G0S2 and did not show any additive effect on mRNA expression of G0S2 even after the treatment with 5-Aza-2'-deoxycytidine.