Bilaterality of breast cancer is an indicator of constitutional cancer susceptibility; however, the molecular causes underlying this predisposition in the majority of cases is not known. We hypothesize that epigenetic misregulation of cancer-related genes could partially account for this predisposition. We have performed methylation microarray analysis of peripheral blood DNA from 14 women with bilateral breast cancer compared with 14 unaffected matched controls throughout 17 candidate breast cancer susceptibility genes including BRCA1, BRCA2, CHEK2, ATM, ESR1, SFN, CDKN2A, TP53, GSTP1, CDH1, CDH13, HIC1, PGR, SFRP1, MLH1, RARB and HSD17B4. We show that the majority of methylation variability is associated with intragenic repetitive elements. Detailed validation of the tiled region around ATM was performed by bisulphite modification and pyrosequencing of the same samples and in a second set of peripheral blood DNA from 190 bilateral breast cancer patients compared with 190 controls. We show significant hypermethylation of one intragenic repetitive element in breast cancer cases compared with controls (P = 0.0017), with the highest quartile of methylation associated with a 3-fold increased risk of breast cancer (OR 3.20, 95% CI 1.78-5.86, P = 0.000083). Increased methylation of this locus is associated with lower steady-state ATM mRNA level and correlates with age of cancer patients but not controls, suggesting a combined age-phenotype-related association. This research demonstrates the potential for gene-body epigenetic misregulation of ATM and other cancer-related genes in peripheral blood DNA that may be useful as a novel marker to estimate breast cancer risk. ACCESSION NUMBERS: The microarray data and associated .BED and .WIG files can be accessed through Gene Expression Omnibus accession number: GSE14603.