Integration of human papillomaviruses (HPVs) into the host genome is considered to be an early and important event in HPV-linked cervical carcinogenesis. Consequently, the viral DNA potentially becomes a target for cellular control mechanisms normally acting on the corresponding integration site. Besides resulting position effects, host-specific DNA methylation may play a functional role in HPV gene regulation. To elucidate the influence of such a kind of epigenetic modification on viral transcription, in vitro methylation studies on HPV-18 upstream regulatory region (URR)-controlled reporter plasmids were carried out. Selective methylation of the viral URR results in a down-regulation of the transcriptional activity, which can be attributed to nonrandom distribution of methyl-acceptor sites clustered within the constitutive enhancer region. In vivo competition experiments show that suppression is not directly mediated by steric hindrance of methyl residues with transcription factors, but rather is due to the association with methyl-CpG DNA-binding proteins. Using a restriction enzyme accessibility assay on both the DNA and chromatin levels, it could be demonstrated that, in vivo, extensively methylated viral DNA is nucleosomally organized, characteristic of transcriptionally inactive chromatin. These data suggest that DNA methylation is an important regulatory pathway in the modulation of HPV expression and as a consequence the proliferation rate of virus-infected cells.