Recently, we reported that breast cancer cell lines fail to express the gene encoding the fatty acid binding protein mammary derived growth inhibitor (MDGI) and that transfection with an MDGI expression vector results in suppression of the malignant phenotype, suggesting that MDGI is a tumor suppressor gene. We also demonstrated that homozygous deletion and point mutation are not common mechanisms for silencing of the MDGI gene in human breast neoplasms. We now report that hypermethylation of HpaII and HhaI sites upstream of the first exon of the MDGI gene, and a SacII site in the first intron, occurs frequently in human breast cancer cell lines. This distinct methylation pattern is associated with loss of transcription and is reversible by treatment with 5-aza-deoxycytidine. Primary breast tumors also exhibited methylation of the SacII site (19 of 35, 54.3%) and the HpaII and HhaI sites (21 of 35, 66%). Hypermethylation of these sites was correlated with the absence of MDGI mRNA in these tumors. Our results suggest that epimutation of the MDGI gene leads to silencing, which, in turn, may initiate or contribute to progression of breast cancer.