Rearrangements in the vicinity of the centromere of chromosome 1 are over-represented in many types of human cancer and are a characteristic feature of a rare genetic disease called ICF (immunodeficiency, centromeric heterochromatin instability, and facial anomalies). Evidence is presented that implicates DNA hypomethylation in the formation of these pericentromeric chromosomal anomalies. The DNA methylation inhibitors 5-azadeoxycytidine and 5-azacytidine, but not other tested genotoxins, induced the preferential formation of pericentromeric rearrangements of chromosome 1 at a very high frequency in a pro-B-cell line (FLEB14) and at a lower frequency in a mature B-cell line (AHH-1). These abnormal chromosomes appear identical to the diagnostic chromosomal aberrations in the ICF syndrome. A major component of the pericentromeric DNA in chromosome 1, satellite 2, was shown to be hypomethylated in an ICF B-cell line, although DNA from this cell line did not display detectable overall hypomethylation. It is hypothesized that demethylation in certain DNA regions, including in pericentromeric satellite DNA, helps lead to pericentromeric chromosomal rearrangements in lymphocytes from ICF patients and in normal lymphoblastoid cells incubated in vitro with DNA demethylating agents.