In neoplastic cells, levels of DNA methyltransferase activity are often increased, and evidence is accruing to suggest an important role for this event in tumorigenesis. To evaluate this possibility further, and to investigate the contribution of increasing de novo, as opposed to maintenance, DNA methylation in mammalian cells, we expressed the bacterial HhaI methyltransferase in cultured murine fibroblasts. This enzyme is a pure de novo DNA methyltransferase that methylates the internal C in the sequence GCGC. We find that both constitutive and induced expression of the wild-type HhaI results, primarily, in lethality to the cells. However, surviving cell clones that express low levels of M. HhaI demonstrate increased tumorigenicity as assessed by soft agar cloning efficiency (8.6% for sense HhaI-transduced PA 317 cells versus 0.4% for antisense controls; 1.7% for sense HhaI-transfected NIH 3T3 cells versus 0% for a mutant HhaI control) and tumorigenicity in nude mouse heterotransplants (75% for sense HhaI-transduced PA 317 cells versus 18.5% for antisense controls). DNA isolated from the clonogenic sense HhaI clones, versus clones expressing the mutant HhaI gene, has no increase in overall CpG methylation but an average of 27% (range, 16.7-38.9) increase in methylcytosine content at GCGC sites. These findings suggest that eukaryotic cells tolerate a narrow window of increase de novo DNA methylating capacity, above which cell death occurs and within cell transformation results. Our results further emphasize the potential role of increased DNA methyltransferase activity in the evolution of cancer.