We have explored a possible role of an activated N-ras oncogene in aberrant methylation of CpG clusters in DNAs of transformed cells. Using three lines of hamster cells transformed by Rous sarcoma virus (RSV) and the method of detection of CpG islands as clustered sites for methylation-sensitive restriction enzymes we have demonstrated that in each cell line the transcribed RSV proviruses are integrated in the vicinity of sequence containing the cluster of unmethylated CpG dinucleotides. Two out of three examined CpG clusters had hypermethylation patterns in N-ras-neo- but not in neo-transfected variants of the cell lines. De novo methylation of CpG dinucleotides correlated with transcriptional inactivation of adjacent RSV proviruses that was related neither to the lack of transcriptional factors binding RSV long terminal repeat (LTR) nor to the transcriptional incompetence of the LTR, as measured by reporter gene assays with the LTR cloned from DNA of these cells. These data suggest that activation of N-ras signal transduction pathway in transformed cells may be relevant to long-term inactivation of selective genes by hypermethylation of their CpG islands.