In general, methylation of the promoter regions is inversely correlated with gene expression. The transitional CpG area between the promoter-associated CpG islands and the nearby retroelements is often methylated in a tissue-specific manner. This study analyzed the relationship between gene expression and the methylation of the transitional CpGs in two human stromal cells derived from the bone marrow (BMSC) and adipose tissue (ATSC), both of which have a multilineage differentiation potential. The transitional CpGs of the osteoblast-specific (RUNX2 and BGLAP), adipocyte-specific (PPARγ2), housekeeping (CDKN2A and MLH1), and mesenchyme-unrelated (RUNX3) genes were examined by methylation-specific PCR. The expression of each gene was measured using reverse-transcription PCR analysis. The RUNX2, BGLAP, and CDKN2A genes in the BMSC, and the PPARγ2 gene in the ATSC exhibited hypomethylation of the transitional CpGs along with the strong expression. The CpG island of RUNX3 gene not expressed in both BMSC and ATSC was hypermethylated. Transitional hypomethylation of the MLH1 gene was accompanied by the higher expression in the BMSC than in the ATSC. The weakly methylated CpGs of the PPARγ2 gene in the BMSC became hypomethylated along with the strong expression during the osteoblastic differentiation. There were no notable changes in the transitional methylation and expression of the genes other than PPARγ2 after the differentiation. Therefore, the transitional methylation and gene expression established in mesenchymal cells tend to be consistently preserved under the induction of differentiation. Weak transitional methylation of the PPARγ2 gene in the BMSC suggests a methylation-dependent mechanism underlying the adiopogenesis of bone marrow. J. Cell. Biochem. 102: 224–239, 2007. © 2007 Wiley-Liss, Inc.