Cytosine methylation is an important mechanism of gene regulation in mammals. Mouse embryos with reduced DNA methylation due to targeted disruption of the DNA methyltransferase gene show deregulated expression of imprinted genes. Loss of imprinting associated with loss of allele-specific methylation is one example of an epigenetic alteration found in tumor cells. Changes in DNA methylation may also be associated with facilitating protooncogene expression and inactivating tumor suppressor genes. However, cytosine methylation has additional deleterious consequences for the genome as well. CpG dinucleotides, the target of DNA methylation, are five-fold underpresented in the genome due to the high mutability of methylated cytosine. C-T transition mutations resulting from deamination of 5-methylcytosine are involved in both genetic disease and cancer. Lastly, aberrant DNA methylation may promote the genetic instability of a chromosomal locus. We review the genetic and epigenetic roles for DNA methylation during tumorigenesis gleaned from altered methycytosine patterns in tumor cells, and from pharmacologic, dietary or genetic manipulation of DNA methylation levels.