We previously reported that the sustained exposure of human urothelial cells (HUCs) to low-dose sodium arsenite induces changes in the gene expression profile and neoplastic transformation. In this study, we used the HumanMethylation27 BeadChip to analyze genome-wide methylation profiles and 5-aza-2'-deoxycytidine to examine the involvement of promoter methylation in gene expression. Because the expression of lipocalin-2 (LCN2) was highly enhanced by promoter hypomethylation in inorganic arsenic (iAs)-HUCs cells as well as bladder cancer tissues, we further showed that mutations at the binding sequences for NF-κB and C/EBP-α significantly reduced LCN2 promoter activity. By chromatin immunoprecipitation assay, we demonstrated the significantly increased binding of RelA (p65) and NF-κB1 (p50) to the hypomethylated promoter of LCN2 in the iAs-HUCs. Furthermore, we also demonstrated that LCN2 overexpression was crucial for the neoplastic characteristics of the iAs-HUCs, such as enhanced anchorage-independent growth, resistance to serum deprivation and activation of NF-κB signaling. In addition, our results indicated that enhanced NF-κB activity in iAs-HUCs was via LCN2-mediated increase in intracellular iron and reactive oxygen species levels. Taken together, our results show that sustained low-dose arsenic exposure results in epigenetic changes and enhanced oncogenic potential via LCN2 overexpression.