Carbamoyl phosphate synthetase 1 (CPS1) is a liver-specific, intramitochondrial, rate-limiting enzyme in the urea cycle. A previous study showed that CPS1 is the antigen for hepatocyte paraffin 1 antibody, a commonly used antibody in surgical pathology practice; and CPS1 expression appears to be down-regulated in liver cancer tissue and cell lines. The aim of this study is to understand how the CPS1 gene is regulated in liver carcinogenesis. In this report, we show that human hepatocellular carcinoma (HCC) cells do not express CPS1, whereas cultured human primary hepatocytes express abundant levels. In addition, CPS1 was silenced or down-regulated in liver tumor tissues compared with the matched noncancerous tissues. The expression of CPS1 in HCC cells was restored with a demethylation agent, 5-azacytidine. We show that two CpG dinucleotides, located near the transcription start site, and a CpG-rich region in the first intron were hypermethylated in HCC cells. The hypermethylation of the two CpG dinucleotides was also detected in HCC tumor tissues compared with noncancerous tissues. Further molecular analysis with mutagenesis indicated that the two CpG dinucleotides play a role in promoter activity of the CPS1 gene. In conclusion, our study demonstrates that DNA methylation is a key mechanism of silencing CPS1 expression in human HCC cells, and CPS1 gene hypermethylation of the two CpG dinucleotides is a potential biomarker for HCC.