The on‐demand gene regulation is crucial for extensively exploring specific gene functions and developing personalized gene therapeutics, which shows great promise in precision medicines. Although some nucleic acid‐based gene regulatory tools (antisense oligonucleotides and small interfering RNAs) are devised for achieving on‐demand activation, the introduction of chemical modifications may cause undesired side effects, thereby impairing the gene regulatory efficacy. Herein, a methyl‐engineered DNAzyme (MeDz) is developed for the visualization of endogenous alkyltransferase (AGT) and the simultaneous self‐sufficiently on‐demand gene regulation. The catalytic activity of DNAzyme can be efficiently blocked by O6‐methylguanine (O6MeG) modification and specifically restored via the AGT‐mediated DNA‐repairing pathway. This simply designed MeDz is demonstrated to reveal AGT of varying expression levels in different cells, opening the possibility to explore the AGT‐related biological processes. Moreover, the AGT‐guided MeDz exhibits cell‐selective regulation on the human early growth response‐1 (EGR‐1) gene, with efficient gene repression in breast cancer cells and low effectiveness in normal cells. The proposed MeDz offers an attractive strategy for on‐demand gene regulation, displaying great potential in biomedical applications.