This review summarizes the basic milestones of the research of 5-azacytosine nucleosides chronologically from their discovery and anticancer activity identification, through to subsequent unveiling of their mechanism of action based on DNA hypomethylation and tumor-suppressor gene reactivation, to the final US FDA approval of 5-azacytidine (Vidaza(®)) and 2'-deoxy-5-azacytidine (Dacogen(®)) for the treatment of myelodysplastic syndromes. 5,6-dihydro-2'-deoxy-5-azacytidine, a compound with anti-HIV activity through lethal mutagenesis, representing a unique mechanism of action among existing anti-retroviral drugs, is discussed together with quite recent discovery of its so far unexpected hypomethylation activity. Special attention is paid to 5-azacytosine acyclic nucleoside analogues and phosphonomethyl derivatives with the emphasis on the new potent anti-DNA virus agent (S)-1-[3-hydroxy-2-(phosphonomethoxy)propyl]-5-azacytosine and its prodrug forms. Considering the potential pharmaceutical applications, 5-azacytosine and 5,6-dihydro-5-azacytosine appear to be so far the most effective cytosine mimics for the design of novel antiviral and anti-tumor drug candidates.