A correlation has been shown between changes in the methylation pattern of cytosine residues in DNA and the expression of specific genes in differentiated tissues. The pattern of DNA methylation is conserved, through cell division, by a maintenance methylase but the mechanism by which a given pattern of methylation is established is unknown. De novo methylation of foreign DNA molecules has been shown to occur in several systems, and may serve as a signal to arrest gene expression. Conversely, treatment of cultured cell lines with 5-azacytidine results in DNA hypomethylation and leads to transcriptional activation of previously unexpressed genes. The results described here demonstrate spontaneous de novo methylation of DNA in a T-lymphoid cell line previously treated with 5-azacytidine to generate glucocorticoid sensitivity. This de novo methylation is accompanied by the acquisition of the glucocorticoid-resistant phenotype.