Silencing of multiple cancer-related genes is associated with de novo methylation of linked CpG islands. Additionally, bivalent histone modification profiles characterized by the juxtaposition of active and inactive histone marks have been observed in genes that become hypermethylated in cancer. It is unknown how these ambiguous epigenetic states are maintained and how they interrelate with adjacent genomic regions with different epigenetic landscapes. Here, we present the analysis of a set of neighboring genes, including many frequently silenced in colon cancer cells, in a chromosomal region at 5q35.2 spanning 1.25 Mb. Promoter DNA methylation occurs only at genes maintained at a low transcriptional state and is characterized by the presence of bivalent histone marks, namely trimethylation of lysines 4 and 27 in histone 3. Chemically induced hyperacetylation and DNA demethylation lead to up-regulation of silenced genes in this locus yet do not resolve bivalent domains into a domain-wide active chromatin conformation. In contrast, active genes in the region become down-regulated after drug treatment, accompanied by a partial loss of chromatin domain boundaries and spreading of the inactive histone mark trimethylated lysine 27 in histone 3. Our results demonstrate that bivalent domains mark the promoters of genes that will become DNA methylated in adult tumor cells to enforce transcriptional silence. These bivalent domains not only remain upon drug induced gene reactivation, but also spread over adjacent CpG islands. These results may have important implications in understanding and managing epigenetic therapies of cancer.