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DNA-methylation patterns are important for regulating genome functions, and are determined by the enzymatic processes of methylation and demethylation. The demethylating enzyme has now been identified: a mammalian complementary DNA encodes a methyl-CpG-binding domain, bears a demethylase activity that transforms methylated cytosine bases to cytosine, and demethylates a plasmid when the cDNA is translated or transiently transfected into human embryonal kidney cells in vitro. The discovery of this DNA demethylase should provide a basis for the molecular and developmental analysis of the role of DNA methylation and demethylation.