MEDEA (MEA) is an Arabidopsis Polycomb group gene that is imprinted in the endosperm. The maternal allele is expressed and the paternal allele is silent. MEA is controlled by DEMETER (DME), a DNA glycosylase required to activate MEA expression, and METHYLTRANSFERASE I (MET1), which maintains CG methylation at the MEA locus. Here we show that DME is responsible for endosperm maternal-allele-specific hypomethylation at the MEA gene. DME can excise 5-methylcytosine in vitro and when expressed in E. coli. Abasic sites opposite 5-methylcytosine inhibit DME activity and might prevent DME from generating double-stranded DNA breaks. Unexpectedly, paternal-allele silencing is not controlled by DNA methylation. Rather, Polycomb group proteins that are expressed from the maternal genome, including MEA, control paternal MEA silencing. Thus, DME establishes MEA imprinting by removing 5-methylcytosine to activate the maternal allele. MEA imprinting is subsequently maintained in the endosperm by maternal MEA silencing the paternal allele.