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Reversal of DNA hypermethylation and associated gene silencing is an emerging cancer therapy approach. Here we addressed the impact of epigenetic alterations and cellular context on functional and transcriptional reprogramming of hepatocellular carcinoma (HCC) cells. Our strategy employed a 3-day treatment of established and primary human HCC-derived cell lines grown as a monolayer at various cell densities with the DNMT1 inhibitor zebularine (ZEB) followed by a 3D culture to identify cells endowed with self-renewal potential. Differences in self-renewal, gene expression, tumorigenicity, and metastatic potential of spheres at generations G1-G5 were examined. Transient ZEB exposure produced differential cell density-dependent responses. In cells grown at low density, ZEB caused a remarkable increase in self-renewal and tumorigenicity associated with long-lasting gene expression changes characterized by a stable overexpression of cancer stem cell-related and key epithelial-mesenchymal transition genes. These effects persisted after restoration of DNMT1 expression. In contrast, at high cell density, ZEB caused a gradual decrease in self-renewal and tumorigenicty, and up-regulation of apoptosis- and differentiation-related genes. A permanent reduction of DNMT1 protein using short hairpin RNA (shRNA)-mediated DNMT1 silencing rendered HCC cells insensitive both to cell density and ZEB effects. Similarly, WRL68 and HepG2 hepatoblastoma cells expressing low DNMT1 basal levels also possessed a high self-renewal, irrespective of cell density or ZEB exposure. Spheres formed by low-density cells treated with ZEB or shDNMT1 displayed a high molecular similarity which was sustained through consecutive generations, confirming the essential role of DNMT1 depletion in the enhancement of cancer stem cell properties. Conclusion: These results identify DNA methylation as a key epigenetic regulatory mechanism determining the pool of cancer stem cells in liver cancer and possibly other solid tumors. (Hepatology 2014;59:2251–2262)