Alterations in cytosine methylation patterns are usually observed in human tumors. The consequences of altered cytosine methylation patterns include both inappropriate activation of transforming genes and silencing of tumor suppressor genes. Despite the biological effect of methylation changes, little is known about how such changes are caused. The heritability of cytosine methylation patterns from parent to progeny cells is attributed to the fidelity of the methylation-sensitive human maintenance methyltransferase DNMT1, which methylates with high specificity the unmethylated strand of a hemimethylated CpG sequence following DNA replication. We have been studying DNA damage that might alter the specificity of DNMT1, either inhibiting the methylation of hemimethylated sites or triggering the inappropriate methylation of previously unmethylated sites. Here, we show that known forms of endogenous DNA damage can cause either hypermethylation or hypomethylation. Inflammation-induced 5-halogenated cytosine damage products, including 5-chlorocytosine, mimic 5-methylcytosine and induce inappropriate DNMT1 methylation within a CpG sequence. In contrast, oxidation damage of the methyl group of 5-methylcytosine, with the formation of 5-hydroxymethylcytosine, prevents DNMT1 methylation of the target cytosine. We propose that reduced DNMT1 selectivity resulting from DNA damage could cause heritable changes in cytosine methylation patterns, resulting in human tumor formation. These data may provide a mechanistic link for the associations documented between inflammation and cancer.