Cadmium is a human carcinogen that likely acts via epigenetic mechanisms. Since DNA methylation alterations represent an important epigenetic event linked to cancer, the effect of cadmium on DNA methyltransferase (MeTase) activity was examined using in vitro (TRL1215 rat liver cells) and ex vivo (M.SssI DNA MeTase) systems. Cadmium effectively inhibited DNA MeTases in a manner that was noncompetitive with respect to substrate (DNA), indicating an interaction with the DNA binding domain rather than the active site. Based on these results, the effects of prolonged cadmium exposure on DNA MeTase and genomic DNA methylation in TRL1215 cells were studied. After 1 week of exposure to 0-2.5 microM cadmium, DNA MeTase activity was reduced (up to 40%) in a concentration-dependent fashion, while genomic DNA methylation showed slight but significant reductions at the two highest concentrations. After 10 weeks of exposure, the cells exhibited indications of transformation, including hyperproliferation, increased invasiveness, and decreased serum dependence. Unexpectedly, these cadmium-transformed cells exhibited significant increases in DNA methylation and DNA MeTase activity. These results indicate that, while cadmium is an effective inhibitor of DNA MeTase and initially induces DNA hypomethylation, prolonged exposure results in DNA hypermethylation and enhanced DNA MeTase activity.