To elucidate the role of epigenetic reprogramming in cell- or tissue-specific differentiation, we explored the role of DNA methyltransferases (Dnmts) in the nerve growth factor (NGF)-induced differentiation of PC12 (pheochromocytoma) cells into neuronal cells. The mRNA and protein levels of de novo methyltransferase Dnmt3b increased, whereas those of Dnmt3a and Dnmt1 decreased, during NGF-induced neurite outgrowth. Dnmt3b localized in the nucleus, as well as in the growing neurites. When the expression of Dnmt3b was inhibited by antisense or small interfering RNA, PC12 cells continued to proliferate and failed to generate neurites. Cells depleted of Dnmt3b were unable to exit the cell cycle even after 6 days of NGF treatment. Furthermore, this failure in differentiation correlated with significant attenuation in tyrosine phosphorylation of TrkA (a marker for NGF-induced differentiation) and reduced the expression of neuronal markers, Hu antigen, and MAP2. The methyl-CpG content of the PC12 genome or the methylation status of repetitive elements was not significantly altered after differentiation and was not affected by Dnmt3b depletion. This was consistent with the ability of the catalytic-site mutant of Dnmt3b to induce differentiation in Dnmt3b-depleted cells after NGF treatment. The Dnmt3b-mediated differentiation was attributed to its N-terminal domain, which recruits histone deacetylase 2 (Hdac2), as demonstrated by (i) impeding of differentiation by the Hdac inhibitors, (ii) facilitation of the differentiation process by overexpression of the N-terminal domain of Dnmt3b, (iii) higher Hdac activity associated with Dnmt3b after NGF treatment, and (iv) coimmunoprecipitation and cosedimentation of Dnmt3b specifically with Hdac2 in a glycerol density gradient. These data indicate a novel role of Dnmt3b in neuronal differentiation.