Cellular behavior and development are extensively altered during the transition from cell cycle into quiescence, though the mechanism involved in establishing and maintaining quiescence is largely unknown. We found that Odd-skipped related 2 (Osr2) was up-regulated during cellular quiescence by serum starvation as well as culturing to confluence. To investigate the regulatory mechanism of Osr2 under these conditions, we characterized the mouse Osr2 promoter. CpG islands in the flanking region of the transcription start site were predominantly methylated in exponentially growing cells, resulting in silencing of Osr2 expression. In addition, CpG demethylation in quiescence caused activation of Osr2 expression, while acetylation of the H3 and H4 histones during quiescence also led to an increase in Osr2 expression. These results suggest that epigenetically regulated Osr2 plays an important role in cellular quiescence and proliferation.