The divergently transcribed Surf-1 and Surf-2 genes are separated by a bi-directional, TATA-less promoter which contains three important factor-binding sites, Su1, Su2 and Su3. The transcription initiation factor YY1 binds to the Su1 site and stimulates transcription in the direction of Surf-1 and, to a lesser extent, Surf-2. Members of the ETS family of transcription factors bind to the Su2 and Su3 sites. Here we show that in transient transfection assays, transcription in both the Surf-1 and the Surf-2 direction is severely reduced by CpG methylation. Although the Su1 site contains three CpG dinucleotides, the binding of YY1 is not affected by CpG methylation. In contrast, the binding of two ETS factors (ETS-2 and PEA-3) to the Su2 site (which also contains three CpG dinucleotides) is totally abolished by CpG methylation. Finally, we show that methylation of a single C within the Su2 site is sufficient to prevent ETS factor binding.