BACKGROUND CDS1 is an enzyme required for the regeneration of the signaling molecule phosphatidylinositol-4,5-bisphosphate (PIP2) from phosphatidic acid. These phosphoinositides and their cleavage products are a class of second messengers, which are involved in cell growth and oncogenesis. The role of CDS1 in the development of hepatocellular carcinoma (HCC) was explored. METHODS The expression of CDS1 in 52 HCC and paired non-cancer tissues was examined by real-time quantitative reverse transcription-polymerase chain reaction analysis. RESULTS The results showed that the expression levels of CDS1 significantly decreased in HCC. However, no mutation was found within the coding region. Interestingly, in the promoter area of the CDS1 gene, most of the CpG sites were methylated in 73% of the cancer tissues; in contrast, only a partial methylation of CpG was found in 50% of the non-cancer tissues. CONCLUSIONS Our results suggested that the down-regulated CDS1 expression in HCC was due to the inactivation of the CDS1 gene by methylation and that the differential expression correlated to the ratio of CpG sites being methylated.