Cancer cells have aberrant patterns of DNA methylation including hypermethylation of gene promoter CpG islands and global demethylation of the genome. Genes that cause familial cancer, as well as other genes, can be silenced by promoter hypermethylation in sporadic tumors, but the methylation of these genes in tumors from kindreds with inherited cancer syndromes has not been well characterized. Here, we examine CpG island methylation of 10 genes (hMLH1, BRCA1, APC, LKB1, CDH1, p16^INK4a, p14^ARF, MGMT, GSTP1 and RARβ2) and 5-methylcytosine DNA content, in inherited (n = 342) and non-inherited (n = 215) breast and colorectal cancers. Our results show that singly retained alleles of germline mutated genes are never hypermethylated in inherited tumors. However, this epigenetic change is a frequent second ‘hit’, associated with the wild-type copy of these genes in inherited tumors where both alleles are retained. Global hypomethylation was similar between sporadic and hereditary cases, but distinct differences existed in patterns of methylation at non-familial genes. This study demonstrates that hereditary cancers ‘mimic’ the DNA methylation patterns present in the sporadic tumors.