We show for the first time that DNA isolated from human colon carcinoma tissue exhibits a selective hypomethylation of versican gene, which encodes a large chondroitin sulfate proteoglycan. The degree of methylation of CpG sequences of versican gene locus, as determined by isoschizomeric endonucleases and Southern hybridization, is about three times lower than that found in either normal colon or ulcerative colitis tissues. Hypomethylation can be observed in both benign and malignant colonic neoplasms; however, there is no correlation with increased expression since versican mRNA levels do not significantly vary between normal and neoplastic tissues. We further show that versican gene locus from malignant tissue, but not from normal or ulcerative colitis tissues, contains Hind III hypersensitive sites which also comprise hypomethylated CpG sequences. Analysis of versican methylation status in colon carcinoma cells and benign mesenchymal cells derived from human colon suggests that the changes observed in vivo derive from demethylating events involving host stromal cells rather than tumor cells themselves. These findings demonstrate that changes in versican gene methylation are specific for colonic neoplasms, that these changes may precede malignant transformation, and that inflammation and tissue remodelling alone are not enough to generate these changes in proteoglycan gene methylation and nuclease hypersensitivity.