The DNA methyltransferase Dnmt1 is responsible for cytosine methylation in mammals and has a role in gene silencing 1, 2, 3, 4. DNA methylation represses genes partly by recruitment of the methyl-CpG-binding protein MeCP2, which in turn recruits a histone deacetylase activity 5, 6. Here we show that Dnmt1 is itself associated with histone deacetylase activity in vivo. Consistent with this association, we find that one of the known histone deacetylases, HDAC1, has the ability to bind Dnmt1 and can purify methyltransferase activity from nuclear extracts. We have identified a transcriptional repression domain in Dnmt1 that functions, at least partly, by recruiting histone deacetylase activity and shows homology to the repressor domain of the trithorax-related protein HRX (also known as MLL and ALL-1). Our data show a more direct connection between DNA methylation and histone deacetylation than was previously considered. We suggest that the process of DNA methylation, mediated by Dnmt1, may depend on or generate an altered chromatin state via histone deacetylase activity.