The tumor suppressor gene hypermethylated in cancer 1 (HIC1), which encodes a transcriptional repressor, is epigenetically inactivated in various human cancers. In this study, we show that HIC1 is a direct transcriptional repressor of the gene encoding ephrin-A1, a cell surface ligand implicated in the pathogenesis of epithelial cancers. We also show that mouse embryos lacking both Hic1 alleles manifest developmental defects spatially associated with the misexpression of ephrin-A1, and that overexpression of ephrin-A1 is a feature of tumors arising in Hic1 heterozygous mice in which the remaining wild-type allele is epigenetically silenced. In breast cancer, we find that ephrin-A1 expression is common in vivo, but that in cell culture, expression of the EphA receptors is predominant. Restoration of HIC1 function in breast cancer cells leads to a reduction in tumor growth in vivo, an effect that can be partially rescued by co-overexpression of ephrin-A1. Interestingly, overexpression of ephrin-A1 in vitro triggers downregulation of EphA2 and EphA4 levels, resulting in an expression pattern similar to that seen in vivo. We conclude that Hic1 spatially restricts ephrin-A1 expression in development, and that upregulated expression of ephrin-A1 resulting from epigenetic silencing of HIC1 in cancer cells may be an important mechanism in epithelial malignancy.