Osteoarthritis is a degenerative joint disease characterized by a progressive and irreversible loss of the articular cartilage, due in main part to the cleavage of type II collagen within the matrix by the enzyme matrix metalloproteinase (MMP)13. Here, we examined the methylation status of MMP13 promoter and report the demethylation of specific CpG dinucleotides within its promoter in osteoarthritic compared to normal cartilage, which correlates with increased MMP13 expression. Of the promoter CpG sites examined, the -104 CpG was consistently demethylated following treatment of human articular chondrocytes with 10 μM DNA-methyltransferase inhibitor 5-aza-2'-deoxycytidine, again correlating with increased MMP13 expression. Methylation of the -104 CpG site resulted in reduced promoter activity in the chondrosarcoma cell line SW1353 as shown by CpG-free luciferase reporter. Using electrophoretic mobility shift assays, we identified CREB as the regulating factor able to only bind to the MMP13 promoter when the -104 CpG is demethylated, and confirmed this binding by chromatin immunoprecipitation. Finally, we demonstrated that CREB induces MMP13 expression only following treatment of SW1353 with 0.5 μM Ca(2+) ionophore A23187. In summary, the -104 CpG is demethylated in osteoarthritic cartilage, correlating with the elevated MMP13 expression and cartilage destruction, providing a highly novel link between epigenetic status and arthritic disease.