As an important regulator in Wnt-signaling pathway, the APC gene is involved in apoptosis and cell cycle arrest. The loss of APC function is observed in most familial adenomatous polyposis-associated and sporadic colorectal cancer. APC gene is frequently inactivated by DNA mutations. However, hypermethylation in APC gene promoter was also observed in different cancers. In this study, by analyzing the methylation status of APC promoter in 22 colorectal cancer cell lines with different APC expression levels, we identified Regions A and B in the promoter, where the methylation of CpG sites was invariably correlated with the loss of gene expression. By nuclease accessibility assay, we also observed a correlation between the closed chromatin conformation in APC promoter and loss of gene expression. When the nonexpressing cell lines were treated with a DNA methyltransferase inhibitor, 5-Aza-2'-Deoxycytidine, the APC expression in these cells was induced, CpG sites were demethylated, and closed chromatin conformation was opened. However, when these cell lines were treated with a histone deacetylase inhibitor, Trichostatin A, no significant changes in APC expression, methylation status, and chromatin conformation were observed. Using transient transfection assay, a CCAAT box located in Region B was identified, which was involved in up-regulation of APC expression. Methylation of CpG sites around the CCAAT box resulted in a significant inhibition in the gene expression. The specific binding of a transcription factor CCAAT-binding factor (CBF) to the CCAAT box was determined by electrophoretic mobility shift analysis. The binding was inhibited after CpG sites close to the CCAAT box were methylated, indicating that DNA methylation can silence gene expression through interfering with the binding of transcription factors to the promoter. The biological function of CBF in APC gene regulation was further indicated by the decrease of luciferase activities in cells cotransfected with a plasmid carrying APC promoter/luciferase gene and a plasmid expressing dominant negative CBF mutant. In summary, methylation of CpG sites around CCAAT box in APC promoter inhibits the gene expression by changing the chromatin conformation and interfering with the binding of transcription factor CBF to CCAAT box.