Our earlier studies had demonstrated that inhibition of DNA methylation following carcinogen treatment potentiated initiation of the carcinogenic process in the rat liver system. The hepatic nodules developed by initiation-promotion protocols showed a characteristic hypomethylation in the cell-cycle-related genes c-fos, c-myc and c-Ha-ras. In the present study we have found that the gene for beta-hydroxy-beta-methyl glutaryl coenzyme A reductase, a major rate-limiting enzyme in the biogenesis of mevalonate, is also hypomethylated at both CCGG and GCGC sites and expressed in hepatic nodules. This gene, however, did not exhibit hypomethylation in CCGG sequences in non-nodular surrounding liver, livers from rats subjected to two-thirds partial hepatectomy, or exposed to initiator alone (1,2-dimethylhydrazine given 18 h after partial hepatectomy) or to diets containing 1% orotic acid alone (promoting regimen). The activity of the enzyme and mevalonate formation are positively correlated with DNA synthesis and cell proliferation--two key components of the carcinogenic process. Taken together, the results suggest that hypomethylation of specific genes occurs in the carcinogenic process and this altered pattern of DNA methylation may play a role in the growth of the nodules.