The mechanism of action of chemotherapeutic drugs and their ability to induce multidrug resistance (MDR) are of relevance to cancer treatment. Overexpression of P-glycoprotein (Pgp) encoded by the MDR1 gene following chemotherapy can severely limit the efficacy of anticancer agents; however, the manner by which cells acquire high levels of Pgp has not been defined. Herein, we demonstrate that chemotherapeutic drugs induce specific epigenetic modifications at the MDR1 locus, concomitant with MDR1 upregulation mediated by transcriptional activation, and a potential post-transcriptional component. We have established that the mechanisms are not mutually exclusive and are dependent on the methylation state of the MDR1 promoter. MDR1 upregulation did not result in further changes to the CpG methylation profile. However, dramatic changes in the temporal and spatial patterning of histone modifications occurred within the 5' hypomethylated region of MDR1, directly correlating with MDR1 upregulation. Specifically, drug-induced upregulation of MDR1 was associated with increases in H3 acetylation and induction of methylated H3K4 within discrete regions of the MDR1 locus. Our results demonstrate that chemotherapeutic drugs can actively induce epigenetic changes within the MDR1 promoter, and enhance the MDR phenotype.