DNA methyltransferase 1 (DNMT1) is responsible for copying DNA methylation patterns to the daughter strands during DNA replication. Its expression is frequently up-regulated in human tumors, including hepatocellular carcinoma, but the mechanism of overexpression and its biological significance remain unclear. Here, we show that hepatitis B virus X protein (HBx) activates DNMT1 expression via a regulatory circuit involving the p16^INK4a-cyclin D1-cyclin-dependent kinase (CDK) 4/6-retinoblastoma protein (pRb)-E2F1 pathway. HBx induced DNA hypermethylation of p16^INK4a promoter to repress its expression, which subsequently led to activation of G₁-CDKs, phosphorylation of pRb, activation of E2F1, and finally transcriptional activation of DNMT1. Inhibition of DNMT1 activity by either treatment with 5′-Aza-2′dC or introduction of DNMT1 small interfering RNA not only abolished the DNA methylation-mediated p16^INK4a repression but also impaired DNMT1 expression itself, suggesting a cross-talk between DNMT1 and p16^INK4a. The up-regulation of cyclin D1 by HBx is likely to serve as an initiative impulse for the circuit because it was absolutely required for the activation of DNMT1 expression. We also observed that accumulated DNMT1 via this pathway inactivates E-cadherin expression through promoter hypermethylation. Considering that the pRb-E2F1 pathway is commonly activated in human tumors, activation of this circuit might be widespread and a potential therapeutic target. [Cancer Res 2007;67(12):5771–8]