DNA methylation is an important epigenetic modification that regulates several genes crucial for tumor development. To identify epigenetically regulated genes in bladder cancer, we performed genome wide expression analyses of eight-bladder cancer cell lines treated with the demethylating agents 5-aza-2′-cytidine and zebularine. To identify methylated C-residues, we sequenced cloned DNA fragments from bisulfite-treated genomic DNA. We identified a total of 1092 genes that showed ≥2-fold altered expression in at least one cell line; 710 showed up-regulation and 382 down-regulation. Extensive sequencing of promoters from 25 genes in eight cell lines showed an association between methylation pattern and expression in 13 genes, including both CpG island and non-CpG island genes. Overall, the methylation patterns showed a patchy appearance with short segments showing high level of methylation separated by larger segments with no methylation. This pattern was not associated with MeCP2 binding sites or with evolutionarily conserved sequences. The genes UBXD2, AQP11, and TIMP1 showed particular patchy methylation patterns. We found several high-scoring and evolutionarily conserved transcription factor binding sites affected by methylated C residues. Two of the genes, FGF18 and MMP11, that were down-regulated as response to 5-aza-2′-cytidine and zebularine treatment showed methylation at specific sites in the untreated cells indicating an activating result of methylation. Apart from identifying epigenetically regulated genes, including TGFBR1, NUPR1, FGF18, TIMP1, and MMP11, that may be of importance for bladder cancer development the presented data also highlight the organization of the modified segments in methylated promoters. This article contains supplementary material available via the Internet at http://www.interscience.wiley.com/jpages/1045-2257/suppmat. © 2008 Wiley-Liss, Inc.