It is well established that DNA hypermethylation of tumor suppressor and tumor-related genes can occur in cancer cells and that each cancer subtype has specific gene sets that are commonly susceptible to methylation and silencing. Glutathione S-transferase (GSTP1) is one example of a gene that is hypermethylated and inactivated in the majority of prostate cancers. We previously reported that hypermethylation of the GSTP1 CpG island promoter in prostate cancer cells is initiated by a combination of transcriptional gene silencing (by removal of the Sp1 sites) and seeds of methylation that, instead of being constantly removed because of demethylation associated with transcription, acts as a catalyst for the spread of methylation across the CpG island. In this study, we now demonstrate that the seeds of DNA methylation also play an important role in initiating chromatin modification. Our results address a number of central questions about the temporal relationship between gene expression, DNA hypermethylation, and chromatin modification in cancer cells. We find that for the GSTP1 gene, (a). histone acetylation is independent of gene expression, (b). histone deacetylation is triggered by seeds of DNA methylation, (c). the spread of DNA hypermethylation across the island is linked to MBD2 and not MeCP2 binding, and (d). histone methylation occurs after histone deacetylation and is associated with extensive DNA methylation of the CpG island. These findings have important implications for understanding the biochemical events underlying the mechanisms responsible for abnormal hypermethylation of CpG island-associated genes in cancer cells.