DNA methylation is an epigenetic mechanism of gene regulation. We have determined that specific modifications in DNA methylation at the IFN-gamma locus occur during memory CD8 T cell differentiation in vivo. Expression of the antiviral cytokine IFN-gamma in CD8 T cells is highly developmental stage specific. Most naive cells must divide before they express IFN-gamma, while memory cells vigorously express IFN-gamma before cell division. Ag-specific CD8 T cells were obtained during viral infection of mice and examined directly ex vivo. Naive cells had an IFN-gamma locus with extensive methylation at three specific CpG sites. An inhibitor of methylation increased the amount of IFN-gamma in naive cells, indicating that methylation contributes to the slow and meager production of IFN-gamma. Effectors were unmethylated and produced large amounts of IFN-gamma. Interestingly, while memory cells were also able to produce large amounts of IFN-gamma, the gene was partially methylated at the three CpG sites. Within 5 h of antigenic stimulation, however, the gene was rapidly demethylated in memory cells. This was independent of DNA synthesis and cell division, suggesting a yet unidentified demethylase. Rapid demethylation of the IFN-gamma promoter by an enzymatic factor only in memory cells would be a novel mechanism of differential gene regulation. This differentiation stage-specific mechanism reflects a basic immunologic principle: naive cells need to expand before becoming an effective defense factor, whereas memory cells with already increased precursor frequency can rapidly mount effector functions to eliminate reinfecting pathogens in a strictly Ag-dependent fashion.