The effect of site-specific CpG methylation on the binding of a HeLa cell transcription factor (MLTF) has been studied. Methylation at a central site within the binding sequence for the factor is found to strongly inhibit binding of MLTF and to inhibit MLTF-dependent transcription in vitro. Methylation of a CpG site only six bases away has no demonstrable effect on binding. When the central CpG is methylated on one strand only, binding of MLTF is partially inhibited. The effects of methylation on the binding of MLTF and on the binding of a limited number of other proteins to DNA demonstrate that methylation in some cases exerts highly specific effects on gene expression. Site-specific demethylation has previously been seen to be associated with the promoter and upstream regions of genes, which suggests that sequence-specific DNA binding proteins that interact with promoters may be involved in the demethylation process. Specific demethylation of a human metallothionein 2A promoter-chloramphenicol acetyl transferase gene construct in mouse L-cells demonstrates that the promoter region sequences of this gene are sufficient to programme their own demethylation.