Understanding the role for DNA methylation in tumorigenesis has evolved from defining the location and extent of methylation in a variety of cancer-related genes to clarifying the functional and site-specific effects of aberrant methylation on gene expression. Our objectives were to characterize the functional effects of DNA methylation in the BRCA1 promoter and to clarify the functional status of the BRCA1 CRE (cAMP response element) motif. Luciferase reporter assays confirm that an intact CRE is important for BRCA1 expression in transient transfections. Luciferase activities were decreased in constructs where the CRE recognition sequence was altered and when constructs were methylated in vitro. Gel mobility shift and competition assays identified a DNA-protein complex recognizing the CRE motif that we were able to supershift using CREB-specific antibody. Furthermore this CRE is methylation sensitive, and we localized this methylation effect to a CpG dinucleotide within the BRCA1 CRE motif. The consequences of aberrant DNA methylation at specific transcription factor motifs, along with the multiple mutational events that can occur in a variety of essential genes such as BRCA1, paint a complex picture where both genetic and epigenetic changes contribute to tumour formation.