HOXA5 is a member of the HOX gene family, which is known to play key roles during embryonic development and in differentiation of adult cells. In addition, HOXA5 has been implicated as a tumour suppressor in breast cancer and shown to transactivate the p53 gene. CpG island methylation is a common mechanism of gene inactivation in tumour cells, but is rarely involved in control of cell-type-specific (CTS) expression in normal cells. However, here we demonstrate that HOXA5 is one of a small number of genes whose CTS expression pattern is controlled by CTS CpG island methylation in normal cells. Furthermore, chromatin immunoprecipitation analysis identified novel patterns of histone modifications associated with DNA methylation of HOXA5. High levels of methylation of histone residues (lysine 9 and 36 of histone H3) previously associated with transcriptional repression were present in the unmethylated, actively transcribing state, and were then reduced following DNA methylation and gene inactivation. Alterations to the normal patterns of HOXA5 gene methylation were also observed in tumour cells. Quantitative analysis of HOXA5 methylation identified the presence of limited methylation in all of the breast, lung and ovarian tumours examined. However, methylation levels in these three tumour types were nearly always low and comparable with that detected in the corresponding normal tissue. In contrast, acute myeloid leukaemia (AML) samples frequently (60% of samples) exhibited very high methylation levels, far greater than that seen in normal haematopoietic cells, suggesting a role for hypermethylation of HOXA5 in the development of AML, consistent with its previously identified role in haematopoietic differentiation.