Klotho is a single pass transmembrane protein, associated with premature aging. We identified tumor suppressor activities for klotho, associated with reduced expression in breast cancer. We now aimed to analyze klotho expression in early stages of breast tumorigenesis and elucidate mechanisms leading to klotho silencing in breast tumors. We studied klotho expression, using immunohistochemistry, and found high klotho expression in all normal and mild hyperplasia samples, whereas reduced expression was associated with moderate and atypical ductal hyperplasia. Promoter methylation and histone deacetylation were studied as possible mechanisms for klotho silencing. Using bisulfite sequencing, and methylation-specific PCR, we identified KLOTHO promoter methylation in five breast cancer cell lines and in hyperplastic MCF-12A cells, but not in the non-tumorous mammary cell line HB2. Importantly, methylation status inversely correlated with klotho mRNA levels, and treatment of breast caner cells with 5-aza-2-deoxycytidine elevated klotho expression by up to 150-fold. KLOTHO promoter methylation was detected in 8/23 of breast cancer samples but not in normal breast samples. Chromatin immunoprecipitation revealed that in HB2 KLOTHO promoter was enriched with AcH3K9; however, in breast cancer cells, H3K9 was deacetylated, and treatment with the histone deacetylase inhibitor suberoylanilide bishydroxamide (SAHA) restored H3K9 acetylation. Taken together, these data indicate loss of klotho expression as an early event in breast cancer development, and suggest a role for DNA methylation and histone deacetylation in klotho silencing. Klotho expression and methylation may, therefore, serve as early markers for breast tumorigenesis.