DNA methylation regulates gene expression in normal and malignant cells. The possibility to reactivate epigenetically silenced genes has generated considerable interest in the development of DNA methyltransferase inhibitors. Here, we provide a detailed characterization of RG108, a novel small molecule that effectively blocked DNA methyltransferases in vitro and did not cause covalent enzyme trapping in human cell lines. Incubation of cells with low micromolar concentrations of the compound resulted in significant demethylation of genomic DNA without any detectable toxicity. Intriguingly, RG108 caused demethylation and reactivation of tumor suppressor genes, but it did not affect the methylation of centromeric satellite sequences. These results establish RG108 as a DNA methyltransferase inhibitor with fundamentally novel characteristics that will be particularly useful for the experimental modulation of epigenetic gene regulation.