DNA methylation inhibits transcription driven by the collagen ␣2(I) promoter and the 5 end of the gene in transient transfection and in vitro transcription assays. DNA-binding proteins in a unique family of ubiquitously expressed proteins, methylated DNA-binding protein (MDBP)/regulatory factor for X box (RFX), form specific complexes with a sequence overlapping the transcription start site of the collagen ␣2(I) gene. Complex formation increased when the CpG site at ؉7 base pairs from the transcription start site was methylated. The identity of the protein was demonstrated by co-migration and cross-competition for a characteristic slowly migrating doublet complex formed on MDBP/RFX recognition sequences and the collagen sequences by band shift assays. A RFX1-specific antibody supershifted the collagen DNA-protein complexes. Furthermore, in vitro translated RFX1 protein formed a specific complex with the collagen sequence that was also supershifted with the RFX1 antibody. MDBP/RFX displayed a higher affinity binding to the collagen sequence if the CpG at ؉7 was mutated in a manner similar to TpG. This same mutation within reporter constructs inhibited transcription in transfection and in vitro transcription assay. These results support the hypothesis that DNA methylationinduced inactivation of collagen ␣2(I) gene transcription is mediated, in part, by increased binding of MDBP/ RFX to the first exon in response to methylation in this region.Type I collagen, the most abundant collagen molecule within the collagen family, normally consists of a heterotrimer of two ␣1(I) chains and one ␣2(I) chain. Synthesis of these genes is often down-regulated upon oncogenic transformation of cells in culture (1-4). We have previously demonstrated down-regulation of the collagen ␣2(I) gene, encoding one of the subunits of Type I collagen in an epithelial-like cell line from rat liver, K16 cells upon their conversion to a tumorigenic line, W8, after treatment with the carcinogen 2-N-(acetoxyacetyl)-aminofluorine (3). The promoter-5Ј region of the ␣2 gene was methylated in the nonexpressing W8 cells and not in the expressing K16 cells (5). Furthermore, reporter gene expression downstream of the 218-bp 1 promoter and the 54-bp 5Ј region of the rat and human collagen ␣2(I) genes was inactivated by in vitro DNA methylation in transient transfection experiments, whereas an analogous expression plasmid with the SV40 early promoter/ enhancer driving expression was not (6). We also demonstrated that a minimal collagen ␣2(I) promoter containing the preinitiation region (Ϫ41 to ϩ54) driving expression of the luciferase reporter gene was inactivated by DNA methylation (7). The inhibition of reporter gene expression was attributable to CpG methylation, specifically of collagen ␣2(I) sequences. However, all the methylation sites were located in the first exon, not in the promoter. DNA methylation in the promoter and 5Ј region of genes often correlates with decreased transcription of vertebrate genes, and many studies indicate that this methyla...