In vitro methylation at CG dinucleotides (CpGs) in a transfecting plasmid usually greatly inhibits gene expression in mammalian cells. However, we found that in vitro methylation of all CpGs in episomal or non-episomal plasmids containing the SV40 early promoter/enhancer (SV40 Pr/E) driving expression of an antibiotic-resistance gene decreased the formation of antibiotic-resistant colonies by only approximately 30-45% upon stable transfection of HeLa cells. In contrast, when expression of the antibiotic-resistance gene was driven by the Rous sarcoma virus long terminal repeat or the herpes simplex virus thymidine kinase promoter, this methylation decreased the yield of antibiotic-resistant HeLa transfectant colonies approximately 100-fold. The low sensitivity of the SV40 Pr/E to silencing by in vitro methylation was probably due to demethylation upon stable transfection. This demethylation may be targeted to the promoter and extend into the gene. By genomic sequencing, we showed that four out of six of the transfected SV40 Pr/E's adjacent Sp1 sites were hotspots for demethylation in the HeLa transfectants. High frequency demethylation at Sp1 sites was unexpected for a non-embryonal cell line and suggests that DNA demethylation targeted to certain aberrantly methylated regions may function as a repair system for epigenetic mistakes.