DNA methyltransferase 1 (DNMT1) is crucial for maintenance of methylation, gene regulation and chromatin stability. DNA mismatch repair, cell cycle regulation in post-mitotic neurons and neurogenesis are influenced by DNA methylation. Here we show that mutations in DNMT1 cause both central and peripheral neurodegeneration in one form of hereditary sensory and autonomic neuropathy with dementia and hearing loss. Exome sequencing led to the identification of DNMT1 mutation c.1484A>G (p.Tyr495Cys) in two American kindreds and one Japanese kindred and a triple nucleotide change, c.1470-1472TCC>ATA (p.Asp490Glu-Pro491Tyr), in one European kindred. All mutations are within the targeting-sequence domain of DNMT1. These mutations cause premature degradation of mutant proteins, reduced methyltransferase activity and impaired heterochromatin binding during the G2 cell cycle phase leading to global hypomethylation and site-specific hypermethylation. Our study shows that DNMT1 mutations cause the aberrant methylation implicated in complex pathogenesis. The discovered DNMT1 mutations provide a new framework for the study of neurodegenerative diseases.