Colorectal cancer is a major cause of cancer death worldwide. A number of key oncogenes and tumor suppressor genes have been proposed to drive progression from healthy colonic epithelia to malignant tumors, including members of the Wnt/beta-catenin pathway. Recently, CpG island promoter hypermethylation was shown to cause inactivation of two extracellular Wnt inhibitors in colon cancer: secreted frizzled-related proteins (sFRPs) and Wnt inhibitory factor-1 (WIF-1). Here, we show for the first time that another extracellular Wnt inhibitor, the DICKKOPF-1 (DKK-1) gene, is transcriptionally silenced by CpG island promoter hypermethylation in colon cancer cell lines (n=9), whereas treatment with the DNA-demethylating agent 5-aza-2-deoxycytidine restored DKK-1 expression. Restoration of DKK-1 function in non-expressing cells bearing a truncated APC (Adenomatous Polyposis Coli) gene had no effect on beta-catenin/T-cell factor-dependent transcription, but induced tumor suppressor-like features such as reduced colony formation density and tumor growth inhibition in nude mice. These results suggest additional functions for DKK-1 other than inhibiting canonical Wnt signaling. In primary colorectal tumors, DKK-1 was found hypermethylated in 17% (nine of 54) of cases. Furthermore, while for both SFRP-1 and WIF-1 methylation-associated silencing occurred across the whole spectrum of colorectal tumorigenesis, DKK-1 promoter was selectively hypermethylated in advanced colorectal neoplasms (Duke's C and D tumors).