DNA methyltransferase inhibitors (DNMT inhibitors) are administered for high-risk MDS, but their action mechanisms are not fully understood. Hence, we performed a genome-wide DNA methylation assay and focused on cholesterol 25-hydroxylase (CH25H) among the genes whose expression was up-regulated and whose promoter region was hypomethylated after decitabine (DAC) treatment in vitro. CH25H catalyzes hydroxylation of cholesterol and produces 25-hydroxycholesterol (25-OHC). Although CH25H mRNA expression level was originally low in MDS/leukemia cell lines, exposure to DNMT inhibitors enhanced CH25H mRNA expression. The promoter region of CH25H was originally hypermethylated in HL-60 and MDS-L cells, but DAC treatment induced their hypomethylation together with increased CH25H mRNA expression, activation of CH25H-oxysterol pathway, 25-OHC production and apoptotic cell death. We further confirmed that normal CD34-positive cells revealed hypomethylated status of the promoter region of CH25H gene. CH25H-knockdown by transfection of shRNA lentiviral vector into the cell lines partially protected the cells from DAC-induced cell death. Exogenous addition of 25-OHC suppressed leukemic cell growth. The present study raises a possibility that DNMT inhibitors activate CH25H-oxysterol pathway by their hypomethylating mechanism and induce leukemic cell death. Further investigations of the promoter analysis of CH25H gene and therapeutic effects of DNMT inhibitors on MDS/leukemia will be warranted.