Silencing of the O6-methylguanine-DNA methyltransferase (MGMT) gene, a key to DNA repair, plays a critical role in the development of cancer. The gene product, functioning normally, removes a methyl group from mutagenic O6-methylguanine, which is produced by alkylating agents and can make a mismatched pair with thymine, leading to transition mutation through DNA replication. MGMT is epigenetically silenced in various human tumors. It is well known that DNA hypermethylation at the promoter CpG island plays a pivotal role in the epigenetic silencing of tumor suppressor genes. MGMT silencing, however, occurs without DNA hypermethylation in some cancer cells. Dimethylation of histone H3 lysine 9 and binding of methyl-CpG binding proteins are common and essential in MGMT-silenced cells. Silencing of MGMT has been shown to be a poor prognostic factor but a good predictive marker for chemotherapy when alkylating agents are used. In this review, we describe recent advances in understanding the silencing of MGMT and its role in carcinogenesis; epigenetic mechanisms; and clinical implications.