The nucleotide 5-methylcytosine is involved in processes crucial in mammalian development, such as X-chromosome inactivation and gene imprinting. In addition, cytosine methylation has long been speculated to be involved in the establishment and maintenance of cell type specific expression of developmentally regulated genes; however, it has been difficult to identify clear examples of such genes, particularly in humans. Here we provide evidence that cytosine methylation of the maspin gene (SERPINB5) promoter controls, in part, normal cell type specific SERPINB5 expression. In normal cells expressing SERPINB5, the SERPINB5 promoter is unmethylated and the promoter region has acetylated histones and an accessible chromatin structure. By contrast, normal cells that do not express SERPINB5 have a completely methylated SERPINB5 promoter with hypoacetylated histones, an inaccessible chromatin structure and a transcriptional repression that is relieved by inhibition of DNA methylation. These findings indicate that cytosine methylation is important in the establishment and maintenance of cell type restricted gene expression.