DNA damage and base excision repair (BER) are actively involved in the modulation of DNA methylation and demethylation. However, the underlying molecular mechanisms remain unclear. In this study, we seek to understand the mechanisms by exploring the effects of oxidative DNA damage on the DNA methylation pattern of the tumor suppressor breast cancer 1 (BRCA1) gene in the human embryonic kidney (HEK) HEK293H cells. We found that oxidative DNA damage simultaneously induced DNA demethylation and generation of new methylation sites at the CpGs located at the promoter and transcribed regions of the gene ranging from −189 to +27 in human cells. We demonstrated that DNA damage-induced demethylation was mediated by nucleotide misincorporation by DNA polymerase β (pol β). Surprisingly, we found that the generation of new DNA methylation sites was mediated by coordination between pol β and the de novo DNA methyltransferase, DNA methyltransferase 3b (DNMT3b), through the interaction between the two enzymes in the promoter and encoding regions of the BRCA1 gene. Our study provides the first evidence that oxidative DNA damage can cause dynamic changes in DNA methylation in the BRCA1 gene through the crosstalk between BER and de novo DNA methylation.