Human gene MAGE-1 encodes tumor-specific antigens that are recognized on melanoma cells by autologous cytolytic T lymphocytes. This gene is expressed in a significant proportion of tumors of various histological types, but not in normal tissues except male germ-line cells. We reported previously that reporter genes driven by the MAGE-1 promoter are active not only in the tumor cell lines that express MAGE-1 but also in those that do not. This suggests that the critical factor causing the activation of MAGE-1 in certain tumors is not the presence of the appropriate transcription factors. The two major MAGE-1 promoter elements have an Ets binding site, which contains a CpG dinucleotide. We report here that these CpG are demethylated in the tumor cell lines that express MAGE-1, and are methylated in those that do not express the gene. Methylation of these CpG inhibits the binding of transcription factors, as seen by mobility shift assay. Treatment with the demethylating agent 5-aza-2'-deoxycytidine activated gene MAGE-1 not only in tumor cell lines but also in primary fibroblasts. Finally, the overall level of CpG methylation was evaluated in 20 different tumor cell lines. It was inversely correlated with the expression of MAGE-1. We conclude that the activation of MAGE-1 in cancer cells is due to the demethylation of the promoter. This appears to be a consequence of a genome-wide demethylation process that occurs in many cancers and is correlated with tumor progression.