Gastric carcinogenesis involves multiple genetic and epigenetic alterations. Epigenetic silencing of tumor-related genes due to CpG island methylation (CIM) has been recently reported in gastric cancer, but the role in precursor lesions is not well understood. We analysed the methylation status of the tumor suppressor gene p16, the DNA mismatch repair gene hMLH1, and four CpG islands (MINT1, MINT2, MINT25, and MINT31) using methylation-specific polymerase chain reaction in 35 polypoid adenomas and 46 flat dysplasias unassociated with carcinoma, 34 early adenocarcinomas (T1N0M0) and associated adenomas/dysplasias, and corresponding adjacent non-neoplastic mucosa. The extent of CIM was defined by the fraction of methylated loci (methylation index), and compared with previously characterized genetic alterations (microsatellite instability (MSI) and APC gene mutation). We found that methylation of p16 was more frequent in adenocarcinoma-associated dysplasias/adenomas (29%) and adenocarcinomas (44%) as compared to flat dysplasias (4%) and adenomas (18%) unassociated with adenocarcinoma (P=0.001). The mean methylation index increased from normal/chronic gastritis (CG) mucosa (0.09) to intestinal metaplasia (IM) (0.16), flat dysplasias (0.40) or polypoid adenomas (0.41) unassociated with carcinoma, dysplasias/adenomas associated with carcinoma (0.44), and adenocarcinomas (0.44). There was no difference in frequencies of high-level CpG island methylation (CIM-H, methylation index ≥0.5) among flat dysplasias (50%) and polypoid adenomas (51%) unassociated with carcinoma, dysplasias/adenomas associated with adenocarcinoma (47%), and adenocarcinoma (47%). CIM-H was present in 15% of IM, but not in normal/CG mucosa. There was a significant correlation between methylation of hMLH1 and high-level of microsatellite instability (MSI-H): methylation of hMLH1 was present in 71% of MSI-H tumors, but only 8% of MSI-low tumors and 13% of microsatellite-stable tumors (P=0.0001). There was no statistical difference between methylation index and APC mutation. Our results indicate that concurrent promoter methylation is an early and frequent event in gastric tumorigenesis, including both MSI-H and microsatellite-stable neoplasms. Methylation of the p16 gene may contribute to the malignant transformation of gastric precursor lesions.