Tissue specific patterns of methylated cytosine residues vary with age, can be altered by environmental factors, and are often abnormal in human disease yet the cellular consequences of DNA methylation are incompletely understood. Although the bodies of highly expressed genes are often extensively methylated in plants, the relationship between intragenic methylation and expression is less clear in mammalian cells. We performed genome-wide analyses of DNA methylation and gene expression to determine how the pattern of intragenic methylation correlates with transcription and to assess the relationship between methylation of exonic and intronic portions of the gene body. We found that dense exonic methylation is far more common than previously recognized or expected statistically, yet first exons are relatively spared compared to more downstream exons and introns. Dense methylation surrounding the transcription start site (TSS) is uncoupled from methylation within more downstream regions suggesting that there are at least two classes of intragenic methylation. Whereas methylation surrounding the TSS is tightly linked to transcriptional silencing, methylation of more downstream regions is unassociated with the magnitude of gene expression. Notably, we found that DNA methylation downstream of the TSS, in the region of the first exon, is much more tightly linked to transcriptional silencing than is methylation in the upstream promoter region. These data provide direct evidence that DNA methylation is interpreted dissimilarly in different regions of the gene body and suggest that first exon methylation blocks transcript initiation, or vice versa. Our data also show that once initiated, downstream methylation is not a significant impediment to polymerase extension. Thus, the consequences of most intragenic DNA methylation must extend beyond the modulation of transcription magnitude.Sequencing data and gene expression microarray data have been submitted to the GEO online database (accession number SRA012081.1). Supporting information including expanded methods and ten additional figures in support of the manuscript is provided.

Data availability. All of the sequencing data is available via Gene Expression Omnibus (GEO) under the accession number GSE117826.

Summary Generating engraftable human hematopoietic cells from autologous tissues promises new therapies for blood diseases. Directed differentiation of pluripotent stem cells yields hematopoietic cells that poorly engraft. Here, we devised a method to phenocopy the vascular-niche microenvironment of hemogenic cells, thereby enabling reprogramming of human endothelial cells (ECs) into engraftable hematopoietic cells without transition through a pluripotent intermediate. Highly purified non-hemogenic human umbilical vein-ECs (HUVECs) or adult dermal microvascular ECs (hDMECs) were transduced with transcription factors (TFs), FOSB, GFI1, RUNX1, and SPI1 (FGRS), and then propagated on serum-free instructive vascular niche monolayers to induce outgrowth of hematopoietic colonies containing cells with functional and immunophenotypic features of multipotent progenitor cells (MPP). These reprogrammed ECs- into human-MPPs (rEC-hMPPs) acquire colony-forming cell (CFC) potential and durably engraft in immune-deficient mice after primary and secondary transplantation, producing long-term rEC-hMPP-derived myeloid (granulocytic/monocytic, erythroid, megakaryocytic) and lymphoid (NK, B) progeny. Conditional expression of FGRS transgenes, combined with vascular-induction, activates endogenous FGRS genes endowing rEC-hMPPs with a transcriptional and functional profile similar to self-renewing MPPs. Our approach underscores the role of inductive cues from vascular-niche in orchestrating and sustaining hematopoietic specification and may prove useful for engineering autologous hematopoietic grafts to treat inherited and acquired blood disorders.