Programmed methylation and demethylation of regulatory sequences has been p
roposed to play a central role in vertebrate development. We report here th
at the methylation status of the 5' regions of a panel of tissue-specific g
enes could not be correlated with expression in tissues of fetal and newbor
n mice. Genes reported to be regulated by reversible methylation were not e
xpressed ectopically or precociously in Dnmt1-deficient mouse embryos under
conditions where demethylation caused biallelic expression of imprinted ge
nes and activated transcription of endogenous retroviruses of the IAP class
. These and other data suggest that the numerous published expression-methy
lation correlations may have described not a cause but a consequence of tra
nscriptional activation. A model is proposed under which cytosine methylati
on represents a biochemical specialization of large genomes that participat
es in specialized biological functions such as allele-specific gene express
ion and the heritable transcriptional silencing of parasitic sequence eleme
nts, whereas cellular differentiation is controlled by conserved regulatory
networks that do not depend on covalent modification of the genome.