The maintenance cytosine DNA methyltransferase DNMT1 and de novo methyltransferase DNMT3b cooperate to establish aberrant DNA methylation and chromatin complexes to repress gene transcription during cancer development. The expression of DNMT3b was constitutively increased 5-20-fold in hTERT/CDK4-immortalized human bronchial epithelial cells (HBECs) before treatment with low doses of tobacco carcinogens. Overexpression of DNMT3b increased and accelerated carcinogen-induced transformation. Genome-wide profiling of transformed HBECs identified 143 DNMT3b-target genes, many of which were transcriptionally regulated by the polycomb repressive complex 2 (PRC2) complex and silenced through aberrant methylation in non-small-cell lung cancer cell lines. Two genes studied in detail, MAL and OLIG2, were silenced during transformation, initially through enrichment for H3K27me3 and H3K9me2, commonly methylated in lung cancer, and exert tumor suppressor effects in vivo through modulating cancer-related pathways. Re-expression of MAL and OLIG2 to physiological levels dramatically reduced the growth of lung tumor xenografts. Our results identify a key role for DNMT3b in the earliest stages of initiation and provide a comprehensive catalog of genes targeted for silencing by this methyltransferase in non-small-cell lung cancer.