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Abstract: The progressive restriction of differentiation potential from pluripotent embryonic stem cells, via multipotent progenitor cells to terminally differentiated, mature somatic cells, involves step-wise changes in transcription patterns that are tightly controlled by the coordinated action of key transcription factors and changes in epigenetic modifications. While previous studies have demonstrated tissue-specific differences in DNA methylation patterns that might function in lineage restriction, it is unclear at what exact developmental stage these differences arise. Here, we have studied whether terminal, multi-lineage differentiation of C2C12 myoblasts is accompanied by lineage-specific changes in DNA methylation patterns. Using bisulfite sequencing and genome-wide methylated DNA- and chromatin immunoprecipitation-on-chip techniques we show that in these cells, in general, myogenic genes are enriched for RNA polymerase II and hypomethylated, whereas osteogenic genes show lower polymerase occupancy and are hypermethylated. Removal of DNA methylation marks by 5-azacytidine (5AC) treatment alters the myogenic lineage commitment of these cells and induces spontaneous osteogenic and adipogenic differentiation. This is accompanied by upregulation of key lineage-specific transcription factors. We subsequently analyzed genome-wide changes in DNA methylation and polymerase II occupancy during BMP2-induced osteogenesis. Our data indicate that BMP2 is able to induce the transcriptional program underlying osteogenesis without changing the methylation status of the genome. We conclude that DNA methylation primes C2C12 cells for myogenesis and prevents spontaneous osteogenesis, but still permits induction of the osteogenic transcriptional program upon BMP2 stimulation. Based on these results, we propose that cell type-specific DNA methylation patterns are established prior to terminal differentiation of adult progenitor cells. This article is part of a Special Issue entitled: 11th European Symposium on Calcium. [Copyright &y& Elsevier]