(1) Background: RX-3117 (fluorocyclopentenyl-cytosine) is a cytidine analog that inhibits DNA methyltransferase 1 (DNMT1). We investigated the mechanism and potential of RX-3117 as a demethylating agent in several in vitro models. (2) Methods: we used western blotting to measure expression of several proteins known to be down-regulated by DNA methylation: O6-methylguanine-DNA methyltransferase (MGMT) and the tumor-suppressor genes, p16 and E-cadherin. Transport of methotrexate (MTX) mediated by the proton-coupled folate transporter (PCFT) was used as a functional assay. (3) Results: RX-3117 treatment decreased total DNA-cytosine-methylation in A549 non-small cell lung cancer (NSCLC) cells, and induced protein expression of MGMT, p16 and E-cadherin in A549 and SW1573 NSCLC cells. Leukemic CCRF-CEM cells and the MTX-resistant variant (CEM/MTX, with a deficient reduced folate carrier) have a very low expression of PCFT due to promoter hypermethylation. In CEM/MTX cells, pre-treatment with RX-3117 increased PCFT-mediated MTX uptake 8-fold, and in CEM cells 4-fold. With the reference hypomethylating agent 5-aza-2′-deoxycytidine similar values were obtained. RX-3117 also increased PCFT gene expression and PCFT protein. (4) Conclusion: RX-3117 down-regulates DNMT1, leading to hypomethylation of DNA. From the increased protein expression of tumor-suppressor genes and functional activation of PCFT, we concluded that RX-3117 might have induced hypomethylation of the promotor.