The Sleeping Beauty (SB) transposase is the most active transposase in vertebrate cells, and the SB transposon system has been used as a tool for insertional mutagenesis and gene delivery. Previous studies have indicated that the frequency of chromosomal transposition is considerably higher in mouse germ cells than in mouse embryonic stem cells, suggesting the existence of unknown mechanisms that regulate SB transposition. Here, we demonstrated that CpG methylation of the transposon region enhances SB transposition. The transposition efficiencies of a methylated transposon and an unmethylated transposon which had been targeted in the same genomic loci by recombination-mediated cassette exchange in mouse erythroleukemia cells were compared, and at least a 100-fold increase was observed in the methylated transposon. CpG methylation also enhanced transposition from plasmids into the genome. Chromatin immunoprecipitation assays revealed that histone H3 methylated at lysine-9, a hallmark of condensed heterochromatin, was enriched at the methylated transposon, whereas the unmethylated transposon formed a relaxed euchromatin structure, as evidenced by enrichment of acetylated histone H3 and reporter gene expression. Possible roles of heterochromatin formation in the transposition reaction are discussed. Our findings indicate a novel relationship between CpG methylation and transposon mobilization.