Several male germ line-specific genes, including MAGE-A1, rely on DNA methylation for their repression in normal somatic tissues. These genes become activated in many types of tumors in the course of the genome-wide demethylation process which often accompanies tumorigenesis. We show that in tumor cells expressing MAGE-A1, the 5' region is significantly less methylated than the other parts of the gene. The process leading to this site-specific hypomethylation does not appear to be permanent in these tumor cells, since in vitro-methylated MAGE-A1 sequences do not undergo demethylation after being stably transfected. However, in these cells there is a process that inhibits de novo methylation within the 5' region of MAGE-A1, since unmethylated MAGE-A1 transgenes undergo remethylation at all CpGs except those located within the 5' region. This local inhibition of methylation appears to depend on promoter activity. We conclude that the site-specific hypomethylation of MAGE-A1 in tumor cells relies on a transient process of demethylation followed by a persistent local inhibition of remethylation due to the presence of transcription factors.