CpG methylation is essential for mouse development as well as gene regulation and genome stability. Many features of mammalian DNA methylation are consistent with the action of a de novo methyltransferase that establishes methylation patterns during early development and the post-replicative maintenance of these patterns by a maintenance methyltransferase. The mouse methyltransferase Dnmt1 (encoded by Dnmt) shows a preference for hemimethylated substrates in vitro, making the enzyme a candidate for a maintenance methyltransferase. Dnmt1 also has de novo methylation activity in vitro, but the significance of this finding is unclear, because mouse embryonic stem (ES) cells contain a de novo methylating activity unrelated to Dnmt1 (ref. 10). Recently, the Dnmt3 family of methyltransferases has been identified and shown in vitro to catalyse de novo methylation. To analyse the function of these enzymes, we expressed Dnmt and Dnmt3a in transgenic Drosophila melanogaster. The absence of endogenous methylation in Drosophila facilitates detection of experimentally induced methylation changes. In this system, Dnmt3a functioned as a de novo methyltransferase, whereas Dnmt1 had no detectable de novo methylation activity. When co-expressed, Dnmt1 and Dnmt3a cooperated to establish and maintain methylation patterns. Genomic DNA methylation impaired the viability of transgenic flies, suggesting that cytosine methylation has functional consequences for Drosophila development.