The Fos and Jun oncoproteins form dimeric complexes that stimulate transcription of genes containing activator protein-1 regulatory elements. We found, by representational difference analysis, that expression of DNA 5-methylcytosine transferase (dnmt1) in fos-transformed cells is three times the expression in normal fibroblasts and that fos-transformed cells contain about 20 percent more 5-methylcytosine than normal fibroblasts. Transfection of the gene encoding Dnmt1 induced morphological transformation, whereas inhibition of dnmt1 expression or activity resulted in reversion of fos transformation. Inhibition of histone deacetylase, which associates with methylated DNA, also caused reversion. These results suggest that fos may transform cells through alterations in DNA methylation and in histone deacetylation.