Cancer cells simultaneously harbor global losses and gains in DNA methylation. We demonstrate that inducing cellular oxidative stress by hydrogen peroxide treatment recruits DNA methyltransferase 1 (DNMT1) to damaged chromatin. DNMT1 becomes part of a complex(es) containing DNMT3B and members of the polycomb repressive complex 4. Hydrogen peroxide treatment causes relocalization of these proteins from non-GC-rich to GC-rich areas. Key components are similarly enriched at gene promoters in an in vivo colitis model. Although high-expression genes enriched for members of the complex have histone mark and nascent transcription changes, CpG island-containing low-expression genes gain promoter DNA methylation. Thus, oxidative damage induces formation and relocalization of a silencing complex that may explain cancer-specific aberrant DNA methylation and transcriptional silencing.