This paper describes the effects of hypomethylation with 5-azacytidine (5azaC) and dihydroxypropyladenine (DHPA) on protonemata of the moss Funaria hygrometrica Hedw. Following treatment with 5azaC or DHPA, hypomethylation of the EcoR II (CCA(T)GG) and Pst I (CTGCAG) sites in ribosomal DNA (rDNA) was confirmed using restriction enzyme analysis and Southern hybridization. Hypomethylation of the genome had profound effects on protonemal differentiation. Whilst apical cell organization and cell dimensions and shape remained unchanged, there was a marked retardation in both cytoplasmic and nuclear differentiation. Developmental abnormalities included: late and erratic side branch formation, some loss of the distinction between chloronema and caulonema, formation of aberrant buds, and loss of the potential to form brood and tmema cells after 5azaC treatment which in general had more profound effects than DHPA. Cytologically, caulonema cells were less highly polarized or unpolarized, and tended to retain small round chloroplasts, whilst nuclei in the hypomethylated protonema endoreduplicated to lower levels and tended to remain more spherical. Increased nucleolar volumes and loss of intranucleolar rDNA heterochromatin following hypomethylation might be the result of increased transcriptional activity of ribosomal RNA (rRNA) genes and drug-induced DNA decondensation, respectively. Growing hypomethylated protonema at 25°C induced extremely atypical cells and development. This temperature sensitivity and aberrations in development overall can be attributed to changes in the normal patterns of gene expression brought about by hypomethylation of gene promoter or regulator regions.