Methylation of DNA at 5-position of cytosine, catalyzed by DNA methyltransferases, is the predominant epigenetic modification in mammals. Aberrations in methylation play a causal role in a variety of diseases, including cancer. Recent studies have established that like mutation, methylation-mediated gene silencing often leads to tumorigenesis. Paradoxically, genome-wide DNA hypomethylation may also play a causal role in carcinogenesis by inducing chromosomal instability and spurious gene expression. Since methylation does not alter DNA base sequence, much attention has been focused recently on developing small molecule inhibitors of DNA methyltransferases that can potentially be used as anticancer agents. Vidaza (5-azacytidine), marketed by Pharmion (Boulder, CO, USA), was the first DNA methyltransferase inhibitor approved by the U.S. Food and Drug Administration (FDA) for chemotherapy against myelodysplastic syndrome (MDS), a heterogeneous bone marrow disorder. Recently MGI Pharma Inc. (Bloomington, MN, USA) got FDA approval to market Dacogen (5-aza-2'-deoxycytidine, or decitabine) for treating MDS patients. These drugs were used earlier against certain anemias to induce expression of fetal globin genes. Interest in clinical trials of these drugs as anticancer agents has been renewed only recently because of reversal of methylation-mediated silencing of critical genes in cancer. Clinical trials have shown that both drugs have therapeutic potential against leukemia such as MDS, acute myeloid leukemia, chronic myelogenous leukemia and chronic myelomonocytic leukemia. In contrast, their effectiveness with solid tumors appears to be less promising, which challenges researchers to develop inhibitors with more efficacy and less toxicity. The major hindrance of their usage as anticancer agents is their instability in vivo as well as the toxicity secondary to their excessive incorporation into DNA, which causes cell cycle arrest. Gene expression profiling in cancer cells revealed that antineoplastic property of these drugs is mediated through both methylation-dependent and -independent pathways. Recently, we have shown that treatment of cancer cells with these cytidine analogues also induces proteasomal degradation of DNA methyltransferase 1, the ubiquitously expressed enzyme upregulated in almost all cancer cells. Development of related stable drugs that can facilitate gene activation in cancer cells by enhancing degradation of DNA methyltransferases without being incorporated into DNA would be ideal for chemotherapy. In this monograph we review historical perspective and recent advances on the molecular mechanisms of action and clinical applications of these DNA hypomethylating agents.