DNA-cytosine-5-methyltransferase 1 (DNMT1) is the enzyme believed to be responsible for maintaining the epigenetic information encoded by DNA methylation patterns. The target recognition domain of DNMT1, the domain responsible for recognizing hemimethylated CGs, is unknown. However, based on homology with bacterial cytosine DNA methyltransferases it has been postulated that the entire catalytic domain, including the target recognition domain, is localized to 500 amino acids at the C terminus of the protein. Vertebrate genomes are modified by methylation of ϳ60 -80% of the cytosines residing at the CG dinucleotide sequence (1). The distribution of methylated cytosines is not random, resulting in gene-and tissue-specific patterns of methylation (2). A large body of evidence supports the hypothesis that both methylation patterns and activity of DNA methyltransferases (DNMTs) 1 play critical roles in development and in controlling genome functions such as differential gene expression, chromosome imprinting, and X-chromosome inactivation (3-5). It has also been suggested that DNMT1 is a downstream effector of many oncogenic pathways and a potential target for anticancer therapy (6 -11). We have previously demonstrated that inhibition of DNMT1 leads to an inhibition of DNA replication (12). Recently, it has been shown that DNMT1 is able to form a complex with Rb, E2F, and HDAC1 and repress E2F-responsive expression (13,14). Furthermore, it has been shown that DNMT1 can establish a transcriptional repressive complex with HDAC2 and DMAP1 at replication foci (15). These data suggest that DNMT1 has multiple functions in the cell. However, because the DNMT1 target recognition domain is unknown it is not possible to determine how these multiple functions and protein-protein interactions relate to its target specificity.If DNA methylation patterns contain significant information, there must be a mechanism that ensures its proper inheritance in cell lineages. Razin and Riggs (16) have proposed that patterns of methylation are inherited, because DNMT1 is more proficient in methylating hemimethylated DNA than nonmethylated DNA. This hypothesis has been verified by a number of experiments (17, 18). Another level of specificity is the ability of DNMT1 to recognize CG sequences almost exclusively (19,20). Thus, DNMT1 exhibits both substrate and sequence specificity.The mammalian DNMT1 is a protein postulated to be composed, based on its similarity to other cytosine DNA methyltransferases, of at least three structural components (21-26). These domains are as follows: a catalytic domain at the C terminus, an N-terminal domain that is responsible for localization of the protein to the nucleus and replication foci, and another poorly characterized central domain. It is unclear as yet which segment is responsible for determining its specificity for hemimethylated CG sequences. Previous reports have shown that when the N-terminal domain is cleaved by proteolysis, the enzyme loses its ability to discriminate between hemimethylated and un...