Aberrant methylation of 5'CpG islands is a key epigenetic event in many human cancers. A PCR-based technique of methylated CpG island amplification followed by representational difference analysis was used to identify genes methylated in cancer. Two of the CpG islands identified mapped to the 5' untranslated region of the PAX5 alpha and beta genes. These genes, located on chromosome 9p13, are transcribed from two distinct promoters and form two alternative first exons that are subsequently spliced to the common exons 2-10. The resulting splice variants encode two distinct transcription factors important in cell differentiation and embryonic development. Examination of the methylation status of each gene using methylation-specific PCR revealed that both genes are methylated in approximately 65% of breast and lung tumors. Bisulfite sequencing revealed dense methylation patterns within each 5'CpG island, strongly correlating with transcriptional silencing. Expression in cell lines with dense methylation of either the PAX5 alpha or beta promoter region was restored after treatment with the demethylating agent 5-Aza-2'-deoxycytidine. The PAX5 beta gene encodes for the transcription factor B cell-specific activating protein that, in turn, directly regulates CD19, a gene shown to negatively control cell growth. A strong association was observed between PAX5 beta methylation and loss of expression of the CD19 gene demonstrating that inactivation of the PAX5 beta gene likely contributes to neoplastic development by inhibiting growth regulation through effects on CD19 gene expression. Recent studies have demonstrated the importance of PAX5 gene alterations in human cancer. Our results are the first to identify aberrant promoter methylation as a common mechanism for dysregulation of these genes in solid tumors.