We have developed a strategy to introduce in vitro-methylated DNA into defined chromosomal locations. Using this system, we examined the effects of methylation on transcription, chromatin structure, histone acetylation, and replication timing by targeting methylated and unmethylated constructs to marked genomic sites, At two sites, which support stable expression from an unmethylated enhancer-reporter construct, Introduction of an in vitro-methylated but otherwise identical construct results in specific changes in transgene conformation and activity, including loss of the promoter DNase I-hypersensitive site, localized hypoacetylation of histones H3 and H4 within the reporter gene, and a block to transcriptional initiation. Insertion of methylated constructs does not alter the early replication timing of the loci and does not result in de novo methylation of flanking genomic sequences, Methylation at the promoter and gene is stable over time, as is the repression of transcription. Surprisingly, sequences within the enhancer are demethylated, the hypersensitive site forms, and the enhancer is hyperacetylated. Nevertheless, the enhancer is unable to activate the methylated and hypoacetylated reporter. Our findings suggest that CpG methylation represses transcription by interfering with RNA polymerase initiation via a mechanism that involves localized histone deacetylation. This repression is dominant over a remodeled enhancer but neither results in nor requires region-wide changes in DNA replication or chromatin structure.
