Mammalian stanniocalcin-2 (STC2) is a secreted glycoprotein hormone with a putative role in unfolded protein response and apoptosis. Here we reported that STC2 expression was sporadically abrogated in human cancer cells by transcriptional silencing associated with CpG island promoter hypermethylation. Direct sequencing of bisulfite-modified DNA from a panel of seven human cancer cell lines revealed that CpG dinucleotides in STC2 promoter was methylated in human ovarian epithelial cancer (SKOV3, OVCAR3 and CaOV3), pancreatic cancer (BxP3), colon adenoma (HT29), and leukemia (Jurkat cells). STC2 CpG island hypermethylation was accompanied with a low basal STC2 expression level. Treatment of these cancer cells with 5-aza-2'-deoxycytidine (5-aza-CdR), an inhibitor of DNA methylation significantly induced STC2 expression. Using SKOV3 cells as a model, the link between DNA demethylation and STC2 expression was consistently demonstrated with hydralazine treatment, which was shown to reduce the protein level of DNA methyltransferase 1 (DNMT1) but stimulated STC2 expression. Two human normal surface ovarian cell-lines (i.e. IOSE 29 and 398) showed no methylation at CpG dinucleotides in the examined promoter region and were accompanied with high basal STC2 levels. Hypoxia stimulated STC2 expression in SKOV3 cells was markedly increased in 5-aza-CdR pretreated cells, showing that DNA methylation may hinder the HIF-1 mediated activation. To elucidate this possibility, RNA interference studies confirmed that endogenous HIF-1 alpha was a key factor for STC2 gene activation as well as in the synergistic induction of STC2 expression in 5-aza-CdR pretreated cells. Chromatin immunoprecipitation (ChIP) assay demonstrated the binding of HIF-1 alpha to STC2 promoter. The binding was increased in 5-aza-CdR pretreated cells. Collectively, this is the first report to show that STC2 was aberrantly hypermethylated in human cancer cells. The findings demonstrated that STC2 epigenetic inactivation may interfere with HIF-1 mediated activation of STC2 expression.