To understand the DNA-methylation mediated gene silencing mechanisms, we analyzed in cell culture of the promoter function of the MAGE-A1 gene, which is frequently demethylated and over-expressed in human hepatocellular carcinoma. We have established the correlation of the DNA methylation of the promoter CpG island with expression status of this gene in a panel of the established liver cancer cell lines. The crucial CpG dinucleotide(s) within the minimal promoter subjected to the control mediated by DNA methylation with profound biological functions was also delineated. Furthermore, a novel sequence-specific DNA-protein interaction at the -30 CpG dinucleotide upstream of the gene was found having a vital part to play in the DNA methylation mediated transcription silencing of the MAGE-A1 gene. Our results would not only provide new insights into the DNA methylation mediated mechanisms over transcription of the MAGE-A1 gene, but also pave the way for further defining the cross-talk among DNA methylation, histone modification and chromatin remodeling in detail.