DNA methylation has an essential regulatory function in mammalian development, serving to repress nontranscribed genes stably in differentiated adult somatic cells. Recent data implicate transcriptional repressors specific for methylated DNA and chromatin assembly in this global control of gene activity. The assembly of specialized nucleosomal structures on methylated DNA helps to explain the capacity of methylated DNA segments to silence transcription more effectively than conventional chromatin. Specialized nucleosomes also provide a potential molecular mechanism for the stable propagation of DNA methylation-dependent transcriptional silencing through cell division.