To study the relationship between DNA methylation and promoter activity we have methylated in vitro the promoters of the mouse metallothionein I gene and the herpes simplex virus thymidine kinase gene. We have transiently transfected these promoters fused to the human growth hormone in their methylated or unmethylated state into mouse L or F9 cells. Promoters methylated by methylase (M.) Hpa II and M.Hha I caused inhibition of reporter gene expression in L cells but not in F9 cells, while methylation of all CpGs by M.Sss I caused inhibition in both cell lines. Repression of promoter activity by M.Hpa II and M.Hha I methylation, but not by M.Sss I methylation, could be alleviated by cotransfection with an excess of untranscribable DNA methylated with M.Sss I. The methylated sites in nuclei isolated from the transfected L cells, but not F9 cells, were found to be protected from Msp I digestion. Taken together these results suggest that a factor present in L cells and missing in F9 cells mediates the methylation-directed inhibition of promoter activity. The ability of methylated DNA to overcome the inhibition seems to reflect competition for the mediator factor. Interestingly, treatment with Zn2+ ions brought about activation of the methylated promoter of the metallothionein gene. Similarly, butyrate could override the repression of the thymidine kinase methylated promoter. These activations were not accompanied by demethylation of the promoter or displacement of the mediator factor.