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Chemical modifications of DNA/histone play an important role in organization of human chromatin into distinct structural
domains that control gene expression, stem cell differentiation and tumorigenesis. Drugs that target various chromatin
modifiers have become one of the promising treatments for many types of cancer including solid tumors and hematologic
malignancies such as myelodysplastic syndrome (MDS) and acute myeloid leukemia (AML). However, most, if not all of the
cancers treated with epigenetic drugs eventually develop drug resistance and render epigenetic drugs ineffective in cancer
patients. The mechanisms underlying the selectivity and efficacy of epigenetic-modifying drugs are still unknown. Therefore,
a major challenge in today�s cancer treatment is to unravel the mechanisms of drug resistance and to develop strategies to
prevent or reverse drug resistance in various types of cancer. In this study, we developed a new method to simultaneously
measure 5-methylcytosine (5-mC) and hydroxymethylcytosine (5-hmC). CDMIAs revealed significantly drug-responsive
changes in 5-mC/5-hmC at the promoters of differentiation/lineage-controlling genes such as PU.1/SPI1. Immunoprecipitation
experiments demonstrated lineage-specific, drug-sensitive interactions between the PU.1/SPI1 and GATA1 transcription
factors and the DNA/histone modifying complexes. ChIP-seq and chromatin conformation capture (3C) showed that distinct
chromatin structures at the gene locus in a lineage-specific manner. Importantly, novel mutations in TET2, TET3, DNMT3L
and PU.1/SP1 were revealed by genome-wide sequencing and confirmed by Sanger sequencing. These mutations correlated
with the altered interactions between PU.1/SPI1 and the DNA/histone modifying complexes and predicted the responses to
epigenetic modifying drugs. Examination of clinical specimens from patients with MDS confirmed the presence of distinct
lineage/differentiation-specific chromatin structures. These results demonstrate the importance of functional genomics in the
pathogenesis of MDS and leukemia and may identify novel therapeutic targets.