Neoplastic cells simultaneously harbor widespread genomic hypomethylation, more regional areas of hypermethylation, and increased DNA-methyltransferase (DNA-MTase) activity. Each component of this "methylation imbalance" may fundamentally contribute to tumor progression. The precise role of the hypomethylation is unclear, but this change may well be involved in the widespread chromosomal alterations in tumor cells. A main target of the regional hypermethylation are normally unmethylated CpG islands located in gene promoter regions. This hypermethylation correlates with transcriptional repression that can serve as an alternative to coding region mutations for inactivation of tumor suppressor genes, including p16, p15, VHL, and E-cad. Each gene can be partially reactivated by demethylation, and the selective advantage for loss of gene function is identical to that seen for loss by classic mutations. How abnormal methylation, in general, and hypermethylation, in particular, evolve during tumorigenesis are just beginning to be defined. Normally, unmethylated CpG islands appear protected from dense methylation affecting immediate flanking regions. In neoplastic cells, this protection is lost, possibly by chronic exposure to increased DNA-MTase activity and/or disruption of local protective mechanisms. Hypermethylation of some genes appears to occur only after onset of neoplastic evolution, whereas others, including the estrogen receptor, become hypermethylated in normal cells during aging. This latter change may predispose to neoplasia because tumors frequently are hypermethylated for these same genes. A model is proposed wherein tumor progression results from episodic clonal expansion of heterogeneous cell populations driven by continuous interaction between these methylation abnormalities and classic genetic changes.