In eukaryotic DNA, 50–90% of the dinucleotide sequence C-G is methylated. Most methylated sites are apparently placed at fixed locations in the genome and this methylation pattern is faithfully inherited from generation to generation¹. Holliday and Pugh² and Riggs³ have suggested that methyl moieties are inherited in a semi-conservative fashion during DNA replication, and this model has been confirmed by experiments in which methylated DNA was integrated into mouse L-cells following DNA-mediated gene transfer^4–6. For this mechanism to operate, two basic requirements must be satisfied: (1) methyl moieties must be symmetrically placed on both strands of the DNA^7,8 and (2) the cellular methylase should be specific for the hemi-methylated substrate present during DNA replication. Here we demonstrate conclusively that the preferred substrate in vitro for the mouse ascites DNA methylase is indeed hemi-methylated DNA. Furthermore, this enzyme seems to methylate exclusively cytosine residues located at the dinucleotide C-G