Limited information is available regarding epigenomic events mediating initiation and progression of tobacco-induced lung cancers. In this study, we established an in vitro system to examine epigenomic effects of cigarette smoke in respiratory epithelia. Normal human small airway epithelial cells and cdk-4/hTERT-immortalized human bronchial epithelial cells (HBEC) were cultured in normal media with or without cigarette smoke condensate (CSC) for up to 9 months under potentially relevant exposure conditions. Western blot analysis showed that CSC mediated dose- and time-dependent diminution of H4K16Ac and H4K20Me3, while increasing relative levels of H3K27Me3; these histone alterations coincided with decreased DNA methyltransferase 1 (DNMT1) and increased DNMT3b expression. Pyrosequencing and quantitative RT-PCR experiments revealed time-dependent hypomethylation of D4Z4, NBL2, and LINE-1 repetitive DNA sequences; up-regulation of H19, IGF2, MAGE-A1, and MAGE-A3; activation of Wnt signaling; and hypermethylation of tumor suppressor genes such as RASSF1A and RAR-beta, which are frequently silenced in human lung cancers. Array-based DNA methylation profiling identified additional novel DNA methylation targets in soft-agar clones derived from CSC-exposed HBEC; a CSC gene expression signature was also identified in these cells. Progressive genomic hypomethylation and locoregional DNA hypermethylation induced by CSC coincided with a dramatic increase in soft-agar clonogenicity. Collectively, these data indicate that cigarette smoke induces 'cancer-associated' epigenomic alterations in cultured respiratory epithelia. This in vitro model may prove useful for delineating early epigenetic mechanisms regulating gene expression during pulmonary carcinogenesis.