In vertebrates, cytosine methylation is an epigenetic DNA modification that participates in genome stability and gene repression. Methylation patterns are either maintained throughout cell division, or modified by global or local de novo methylation and demethylation. Site-specific demethylation is a rather elusive process that occurs mainly in parallel to gene activation during development. In light of our studies of the glucocorticoid-dependent DNA demethylation of the tyrosine aminotransferase gene, we discuss the potential biochemical mechanisms allowing DNA demethylation and its targeting to specific sequences by transcription factors as well as possible links to DNA replication and chromatin remodelling.