Both DNA-AAF and MNU-alkylated DNA are methylated less than nonmodified DNA by rat brain nuclei cytosine 5-methyltransferase purified either by chromatography on DEAE cellulose or by Dyematrex. The inhibition of methylation is proportional to the modification of the DNA, and DNA having a given percentage of bases modified with MNU is less methylated than DNA modified to the same extent with AAF. Moreover, DNA-AAF irreversibly inhibits the methylation of native DNA, whereas MNU-alkylated DNA does not inhibit the methylation of native DNA. The AAF-substituted DNA has a higher affinity for the enzyme than native DNA. However, this is probably not due to the AAF-induced local destabilization of the DNA helix, since heat-denatured DNA shows a lower affinity for the enzyme than double-stranded DNA. Addition of DNA-AAF to the enzyme preincubated with native DNA inhibits methylation, but only after a lag period. This agrees with the model in which the methylase walks along the strand to methylate cytosine residues before being detached from the DNA. AAF bound to guanine residues may block the movement of the enzyme along the helix. The in vitro hypomethylation of DNA, caused by carcinogens, could explain the in vivo observations made by several authors and could have significance in gene activity, cellular differentiation, and oncogenesis.