Epiregulin (EREG) induces cell growth by binding to the epidermal growth factor receptor (EGFR). Expression of EREG affects sensitivity to cetuximab a chimeric monoclonal antibody that inhibits the EGFR signaling pathway. The mechanism through which EREG is regulated is largely unknown, but a methyl-array study previously performed by our group revealed that EREG is methylated in gastric cancer cells. In this study, we found that EREG gene expression was low in 7 out of 11 gastric cancer cells and this downregulation was mediated by aberrant CpG methylation of the EREG promoter. Treatment with 5-aza-CdR restored EREG expression and demethylated CpG sites in the EREG promoter. Compared with DNA methyltransferase 1 (DNMT1), knock-down of DNA methyltransferase 3b (DNMT3b) significantly increased the expression of EREG and led to the demethylation of specific CpG sites in the EREG promoter, suggesting that DNMT3b primarily regulates CpG methylation and silencing of the EREG gene. EREG methylation was observed in 30% (4/13) of human primary gastric tumor tissues we evaluated. In addition to DNA methylation, results from a chromatin immunoprecipitation assay demonstrated that transcriptional levels of EREG were associated with the enrichment of active histone marks (H3K4me3 and AcH3) and of a repressive mark (H3K27me2). Treatment with 5-aza-CdR dynamically increased the low occupancy of H3K4me3 and AcH3, while decreasing the high enrichment of H3K27me2, indicating that dynamic histone modifications contribute to EREG regulation in addition to DNA methylation. Finally, the combination of 5-aza-CdR and cetuximab exerted a synergistic anti-proliferative effect on gastric cancer cells. Taken together, the results of our study showed for the first time that EREG is epigenetically silenced in gastric cancer cells by aberrant DNA methylation and histone modification.