Current data suggest that angiogenesis, smooth muscle cell migration, differentiation and proliferation may be epigenetically regulated. Prokaryotic DNA methyltransferases have been proposed as tools to modify mammalian DNA methylation. In order to assess the impact of DNA hypermethylation on smooth muscle pathophysiology, we expressed an HpaII site-specific methyltransferase transgene in smooth muscle cells in mice. The enzyme is expected to target only a subset (CCGG) of unmethylated CpG dinucleotides, thus avoiding possible deleterious effects of widespread hypermethylation. Transgenics of two independent lines were born at expected frequencies, showed no obvious abnormalities and were fertile. Nevertheless, ~30% of > 1 year-old transgenics developed organomegaly and ~20% showed a range of tumors. Global DNA methylation was unchanged in transgenic tissue whether hyperplastic or normal, but tumor DNA showed a pronounced global hypermethylation. DNA hypermethylation was not indiscriminate, as five tested tumor suppressor genes showed promoter CpG and non-CpG hypermethylation and transcriptional down-regulation, whereas the methylation status of one intergenic CpG islands, repeated elements (n=2) and non-tumor suppressor gene promoters (n=3) was unchanged. Our work is the first report on the effects of HpaII methyltransferase on endogenous chromatin and in a whole animal. Furthermore, our data expand previous findings that imply that global DNA hypomethylation is not an obligate oncogenic pathway at least in the tumor types examined here.