Induced expression of the Abcb1 drug transporter often occurs in tumors in response to chemotherapy. The role that epigenetic modifications within the ABCB1 promoter play in Abcb1 expression remains unclear. We selected MCF-7 cells for survival in increasing doses of chemotherapy drugs, and assessed the methylation status of 66 CpG sites within the ABCB1 promoter preceding, accompanying and following the onset of drug resistance. Increased ABCB1 transcript expression coincident with acquisition of resistance to epirubicin or paclitaxel was temporally associated with hypomethylation of the ABCB1 downstream promoter in the absence of gene amplifications or changes in mRNA stability. Treatment of control MCF-7 cells with demethylating and/or acetylating agents increased ABCB1 transcript expression. In addition to broad promoter hypomethylation, dramatic reductions in the methylation of specific CpG sites within the promoter were observed, suggesting that these sites may play a predominant role in transcriptional activation through promoter hypomethylation. Furthermore, our data suggest that allele-specific reductions in ABCB1 promoter methylation regulate promoter usage within paclitaxel-resistant cells. This study provides strong evidence that changes in ABCB1 promoter methylation, ABCB1 promoter usage and ABCB1 transcript expression can be temporally and causally correlated with the acquisition of drug resistance in breast tumor cells.