We have shown previously that AWT1 and WT1-AS are functionally imprinted in human kidney. In the adult kidney, expression of both transcripts is restricted to the paternal allele, with the silent maternal allele retaining methylation at the WT1 antisense regulatory region (WT1 ARR). Here, we report characterization of the WT1 ARR differentially methylated region and show that it contains a transcriptional silencer element acting on both the AWT1 and WT1-AS promoters. DNA methylation of the silencer results in increased transcriptional repression, and the silencer is also shown to be an in vitro and in vivo target site for the imprinting regulator protein CTCF. Binding of CTCF is methylation-sensitive and limited to the unmethylated silencer. Potentiation of the silencer activity is demonstrated after CTCF protein is knocked down, suggesting a novel silencer-blocking activity for CTCF. We also report assessment of WT1 ARR methylation in developmental and tumour tissues, including the first analysis of Wilms' tumour precursor lesions, nephrogenic rests. Nephrogenic rests show increases in methylation levels relative to foetal kidney and reductions relative to the adult kidney, together with biallelic expression of AWT1 and WT1-AS. Notably, the methylation status of CpG residues within the CTCF target site appears to distinguish monoallelic and biallelic expression states. Our data suggest that failure of methylation spreading at the WT1 ARR early in renal development, followed by imprint erasure, occurs during Wilms' tumourigenesis. We propose a model wherein imprinting defects at chromosome 11p13 may contribute to Wilms' tumourigenesis.