DNA methylation inhibits gene expression in animal cells, probably by affecting chromatin structure. Biochemical studies suggest that this process may be mediated by methyl-specific binding proteins that recruit enzymatic machinery capable of locally altering histone modification. To test whether DNA methylation actually has a role in the assembly of chromatin during normal development, we used cell transfection and a transgene construct genetically programmed to be either methylated or unmethylated in all cell types of the mouse. Chromatin immunoprecipitation (ChIP) analysis shows that the presence of DNA methylation brings about the deacetylation of histone H4 and methylation of Lys9 of histone H3 (H3 Lys9) and prevents methylation of Lys4 of histone H3 (H3 Lys4), thus generating a structure identical to that of methylated sequences in the genome. These results indicate that the methylation pattern established in early embryogenesis is profoundly important in setting up the structural profile of the genome.