Instability of transgene expressions is frequently associated with DNA methylation. One important factor in the establishment of de novo DNA methylation is sequence homology. Multiple copy transformants are specifically prone to de novo methylation. Cloning repetitive sequences next to a marker gene leads to an instability of marker activity, reminiscent of position effect variegation (PEV) in Drosophila. The combination of a hypermethylated and a hypomethylated allele leads to a paramutation-like phenomenon, i.e. the semi-dominant and heritable repression of the hypomethylated allele by the hypermethylated allele. Apparently plants contain a homology searching mechanism responsible for the induction and exchange of hypermethylation patterns among homologous sequences. The molecular mechanism of a homology based transfer of DNA methylation patterns is unclear, but indirect evidence suggests a participation of an altered chromatin structure. Besides cytosine residues within symmetrical CpG or CpNpG sites, we detect methylation at non symmetrical C-residues. The clustered arrangement of non symmetrical methylation patterns, which is found at particular regions, but not at identical C residues, suggests the recognition of secondary structures by DNA methyltransferase. Nuclear digestion assays show a higher accessibility at certain sites in the chromatin of a hypomethylated allele, compared to a hypermethylated allele. We suggest that DNA methylation is associated with a condensed chromatin structure that mediates a PEV-like spread of methylation patterns and its transfer to homologous sequences.