The methylation of specific cytosine residues in DNA has been implicated in regulating gene expression and facilitating functional specialization of cellular phenotypes. Generally, the demethylation of certain CpG sites correlates with transcriptional activation of genes. 5-Azacytidine is an inhibitor of DNA methylation and has been widely used as a potent activator of suppressed genetic information. Treatment of cells with 5-azacytidine results in profound phenotypic alterations. The drug-induced hypomethylation of DNA apparently perturbs DNA-protein interactions that may consequently alter transcriptional activity and cell determination. The inhibitory effect of cytosine methylation may be exerted via altered DNA-protein interactions specifically or may be transduced by a change in the conformation of chromatin. Recent studies have demonstrated that cytosine methylation also plays a central role in parental imprinting, which in turn determines the differential expression of maternal and paternal genomes during embryogenesis. In other words, methylation is the mechanism whereby the embryo retains memory of the gametic origin of each component of genetic information. A memory of this type would probably persist during DNA replication and cell division as methylation patterns are stable and heritable.