Cancer/testis (CT) genes show highly restricted expression among normal tissues, limited to germ cells in the testis and ovary, and to trophoblast cells, , but are frequently expressed in various cancers. Other than a clear association with promoter-specific demethylation and histone deacetylation, the specific mechanisms by which these genes are expressed are currently unknown. In this study, we tested various mechanisms including promoter- and region-specific epigenetic mechanisms to gain a better understanding of CT gene expression. To better study the epigenetic mechanisms regulating CT gene expression, we searched for a model that dynamically expresses CT genes. As a result of preliminary bioinformatic efforts and literature search, we chose to study CT gene expression in Caco-2 spontaneous differentiation model. We showed that PAGE-2,-2B and SPANX-B genes were up-regulated significantly as Caco-2 cells differentiated. Differentiation was also characterized as a mesenchymal to epithelial transition as evidenced by the decrease in mesenchymal markers (Fibronectin1, Vimentin and Transgelin) and the concomitant increase in epithelial markers (E-cadherin, Claudin 4 and Cdx2). CT protein (SPANX-B and PAGE-2,-2B) positive cells were positive for epithelial protein (Cdx2), and negative for mesenchymal proteins (Fibronectin1, Vimentin). Although we could not find a significant difference in promoter proximal DNA demethylation of CT genes, we identified that promoter proximal DNA was hydroxymethylated with a gradual increase in hydroxymethylation as cells differentiated. The change in hydroxymethylation level was concordant with an increase in TET enzyme levels and co-localization of TET2 protein with CT proteins in the corresponding cells. Besides, we found that promoters of CT genes lost EZH2, H3K27me3 and HP1 marks as CT genes were up-regulated. Reversal of differentiation resulted in loss of CT and TET gene expression and EMT induction. Thus, for the first time, we describe dynamic expression of CT genes in association with DNA hydroxymethylation in mesenchymal to epithelial transition. In addition to promoter-proximal alterations, we thought that epigenetic alterations leading to CT gene expression in cancer could occur within larger regions containing CT v genes, but with clear boundaries. As genes that do not show an expression pattern similar to CT genes can be located within their proximity, we hypothesized that there could be clear boundaries between neighbouring regions containing CT genes and those with non-CT type expression patterns. We, therefore, identified 2 genes; ALAS2 and CDR1, in close proximity to two different CT genes (PAGE-2,-2B and SPANX-B), which were downregulated in cancer, and thus showed an expression pattern opposite to that of these two CT genes. ALAS2 and CDR1 were downregulated in lung and colon cancer cell lines compared to healthy counterparts. We found that the downregulation of ALAS2 and CDR1 in cancer cell lines, in contrast to CT genes, was independendent of DNA hypomethylation. We also found that ALAS2 and CDR1 downregulation in cancer was possibly related to decreased levels of hydroxymethylation in promoter proximal regions. As the upregulation of PAGE-2,-2B and SPANX-B genes was associated with increased hydroxymethylation at promoter-proximal regions, these two groups of genes, despite their close proximity were found to be controlled inversely albeit possibly by the same mechanisms. We tested if ectopic upregulation of ALAS2 and CDR1 in cancer cell lines would result in a tumor-suppressive effect, but were unable to find any. As both genes are located about 200 and 50 kbs from SPANX-B and PAGE-2, we propose that the there might be a boundary within these regions that could possibly have an insulatorlike function to help distinguish the two very different epigenetic events occuring in tumorigenesis. As almost all CT genes map within highly homologous inverted repeats it is possible that 3 dimensional chromosomal structures formed around these repeats underlie the common epigenetic mechanism responsible for coordinate CT gene expression. To test for this hypothesis, we analyzed expression of various transcripts identified within and outside the NY-ESO-1 repeat region. However, we could not find a correlation between the presence of such transcripts and CT gene expression patterns.