DNA methylation in the promoter of certain genes is associated with transcriptional silencing. Methylation affects gene expression directly by interfering with transcription factor binding and/or indirectly by recruiting histone deacetylases through methyl-DNA-binding proteins. In this study, we demonstrate that the human lung cancer cell line H719 lacks p53-dependent and -independent p21^Cip1 expression. p53 response to treatment with gamma irradiation or etoposide is lost due to a mutation at codon 242 of p53 (C→W). Treatment with depsipeptide, an inhibitor of histone deacetylase, was unable to induce p53-independent p21^Cip1 expression because the promoter of p21^Cip1 in these cells is hypermethylated. By analyzing luciferase activity of transfected p21^Cip1 promoter vectors, we demonstrate that depsipeptide functions on Sp1-binding sites to induce p21^Cip1 expression. We hypothesize that hypermethylation may interfere with Sp1/Sp3 binding. By using an electrophoretic mobility shift assay, we show that, although methylation within the consensus Sp1-binding site did not reduce Sp1/Sp3 binding, methylation outside of the consensus Sp1 element induced a significant decrease in Sp1/Sp3 binding. Depsipeptide induced p21^Cip1 expression was reconstituted when cells were pretreated with 5-aza-2′-deoxycytidine. Our data suggest, for the first time, that hypermethylation around the consensus Sp1-binding sites may directly reduce Sp1/Sp3 binding, therefore leading to a reduced p21^Cip1 expression in response to depsipeptide treatment.