Molecular‐targeted therapy is a hopeful approach for pancreatic cancer. Silencing of tumor suppressor genes can occur by histone deacetylation and/or DNA methylation in the promoter. Here, we identified epigenetically silenced genes in pancreatic cancer cells. Pancreatic cancer cell line, PANC‐1 cells were treated either with or without 5Aza‐dC (a DNA methyltransferase inhibitor) and suberoylanilide hydroxamic acid (SAHA, a histone deacetylase inhibitor), and mRNA was isolated from these cells. Oligonucleotide microarray analysis revealed that 30 genes including UCHL1, C/EBPα, TIMP2 and IRF7 were up‐regulated after treatment with 5Aza‐dC and SAHA in PANC‐1. The induction of these 4 genes was validated by real‐time PCR in several pancreatic cancer cell lines. Interestingly, expression of C/EBPα was significantly restored in 6 of 6 pancreatic cancer cell lines. Chromatin immunoprecipitation assay revealed that histone H3 of the promoter region of C/EBPα was acetylated in PANC‐1 treated with SAHA; and bisulfate sequencing showed methylation of its promoter region in several pancreatic cancer cell lines. Forced expression of C/EBPα markedly suppressed clonal proliferation of PANC‐1 cells. Co‐immunoprecipitation assay showed the interaction of C/EBPα and E2F1; and the interaction caused the inhibition of E2F1 transcriptional activity. Immunohistochemical analysis revealed that C/EBPα localized in the cytoplasm in pancreatic adenocarcinoma cells, whereas it localized predominantly in the nucleus in normal pancreatic cells. Our data demonstrated that aberrant silencing, as well as, inappropriate cytoplasmic localization of C/EBPα causes dysregulation of its function, suggesting that C/EBPα is a novel candidate tumor suppressor gene in pancreatic cancer cells. © 2008 Wiley‐Liss, Inc.