We have partially purified a DNA methyltransferase from human placenta using a novel substrate for a highly sensitive assay of methylation of hemimethylated DNA. This substrate was prepared by extensive nick translation of bacteriophage XP12 DNA, which normally5 has virtually all of its cytosine residues replaced by 5-methylcytosine (m C). Micrococcus luteus DNA wgs just as good a substrate if it was first similarly nick translated with m dCTP instead of dCTP in the polymerization mixture. At different stages in purification and under various conditions (including in the _presence or absence of high mobility group proteins), the methylation of m C-deficient DVA and that of hemimethylated DNA were compared. Although hemimethylated, m C-rich DNAs were much better substrates than were m C-deficient DNAs and normal XP12 DNA could not be methylated, all of these DNAs were bound equally well by the enzyme. In contrast, from the same placental extraSt, a DNAbinding protein of unknown functon was isolated which binds to m C-rich DNA in preference to the analogous m C-poor DNA.