Arsenic is an important environmental carcinogen that affects millions of people worldwide through contaminated water supplies. Chronic exposure of arsenic has been shown to induce malignant transformation of mammalian cells; however, the mechanism underlying arsenic-induced carcinogenesis is not clear. The (1) induction in the cell proliferation, (2) decrease in DNA repair capacity resulting in the accumulation of mutations, and (3) changes in the DNA methylation patterns affecting regulation of genes are hallmarks of cancer development. Thus, the purpose of this study was to determine whether long-term exposure of both low and high concentrations of arsenic can perturb cell proliferation, DNA repair, and the maintenance of DNA methylation status in TM3 cells, an immortalized Leydig cell derived from normal mouse testis. The effect of arsenic on cell proliferation was determined by cell count data, and arsenic-induced gene expression changes were measured by quantitative real-time polymerase chain reduction (PCR). The results this study revealed a concentration-dependent induction of cell proliferation by arsenic. Increased expression of cell proliferation marker genes (PCNA, CyclinD1) and DNA methylation (DNA Methyl Transferase I) and decreased expression of genes for DNA repair (DNA Polymerase beta, ERCC6) with lower concentrations of arsenic was also observed. Thus, the findings of this study are novel, as they indicate a mechanism for arsenic-induced cancers. This is based on the observed increase in cell proliferation and decrease in the capacity of cells to maintain its genomic stability. Our study provides the evidence that arsenic may play a role in the etiology of testicular cancer.