Cytosine methylation of CpG sites in the promoter region of eucaryotic genes is involved in the inactivation of expression of certain genes. Given that methylation can lead to reduced transcription, it is possible that expression of tumor-suppressor genes is also inactivated by hypermethylation, thereby contributing to the etiology of cancer. Recently we found five sporadic retinoblastoma tumors (16% of all unilateral cases) with hypermethylation of the 5' end of the retinoblastoma gene without detecting any structural abnormalities. However, it is unclear whether the promoter of the retinoblastoma gene is actually inactivated by its hypermethylation. Here we show that specific hypermethylation in the promoter region of the retinoblastoma gene reduces its expression to only 8% of the unmethylated control. Furthermore, we have found that two transcription factors important for the promoter activity, an activating transcription factor (ATF)-like factor and the retinoblastoma binding factor 1, do not bind when their recognition sequences are CpG methylated. These results in vitro strongly support the hypothesis that CpG methylation of the human tumor-suppressor gene can result in the inactivation of the gene and thus lead to oncogenesis.