Ectopic secretion of ACTH, from sites such as small cell lung cancer (SCLC), results in severe Cushing's syndrome. ACTH is cleaved from POMC. The syndrome may occur when the highly tissue-specific promoter of the human POMC gene (POMC) is activated. The mechanism of activation is not fully understood. This promoter is embedded within a defined CpG island, and CpG islands are usually considered to be unmethylated in all tissues. We demonstrate that much of this CpG island is methylated in normal nonexpressing tissues, in contrast to somatically expressed CpG island promoters reported to date, and is specifically unmethylated in expressing tissues, tumors, and the POMC-expressing DMS-79 SCLC cell line. A narrow 100-bp region is free of methylation in all tissues. E2F factors binding to the upstream domain IV region of the promoter have been shown to be involved in the expression of POMC in SCLC. We show that these sites are methylated in normal nonexpressing tissues, which will prevent binding of E2F, but are unmethylated in expressing tissue. Methylation in vitro is sufficient for silencing of expression, which is not reversed by treatment with Trichostatin A, suggesting that inhibition of expression may be mediated by means other than recruitment of histone deacetylase activity. The DMS-79 cells lack POMC demethylating activity, implying that the methylation and expression patterns are likely to be set early or before neoplastic transformation, and that targeted de novo methylation might be a potential therapeutic strategy.