O6-methylguanine-DNA methyltransferase (MGMT) repairs the cytotoxic and mutagenic O6-alkylguanine produced by alkylating agents such as chemotherapeutic agents and mutagens. Recent studies have shown that in a subset of tumors, MGMT expression is inversely linked to hypermethylation of the CpG island in the promoter region; however, how the epigenetic silencing mechanism works, as it relates to hypermethylation, was still unclear. To understand the mechanism, we examined the detailed methylation status of the whole island with bisulfite-sequencing in 19 MGMT non-expressed cancer cell lines. We found two highly methylated regions in the island. One was upstream of exon 1, including minimal promoter, and the other was downstream, including enhancer. Reporter gene assay showed that methylation of both the upstream and downstream regions suppressed luciferase activity drastically. Chromatin immunoprecipitation assay revealed that histone H3 lysine 9 was hypermethylated throughout the island in the MGMT negative line, whereas acetylation on H3 and H4 and methylation on H3 lysine 4 were at significantly high levels outside the minimal promoter in the MGMT-expressed line. Furthermore, MeCP2 preferentially bound to the CpG-methylated island in the MGMT negative line. Given these results, we propose a model for gene silencing of MGMT that is dependent on the epigenetic state in cancer.