In the cell, Dnmt1 is the major enzyme in maintenance of the pattern of DNA methylation after DNA replication. Evidence suggests that the protein is located at the replication fork, where it could directly modify nascent DNA immediately after replication. To elucidate the potential mechanism of this process, we investigate the processivity of DNA methylation and accuracy of copying an existing pattern of methylation in this study using purified Dnmt1 and hemimethylated substrate DNA. We demonstrate that Dnmt1 methylates a hemimethylated 958-mer substrate in a highly processive reaction. Fully methylated and unmethylated CG sites do not inhibit processive methylation of the DNA. Extending previous work, we show that unmethylated sites embedded in a hemimethylated context are modified at an approximately 24-fold reduced rate, which demonstrates that the enzyme accurately copies existing patterns of methylation. Completely unmodified DNA is methylated even more slowly due to an allosteric activation of Dnmt1 by methylcytosine-containing DNA. Interestingly, Dnmt1 is not able to methylate hemimethylated CG sites on different strands of the DNA in a processive manner, indicating that Dnmt1 keeps its orientation with respect to the DNA while methylating the CG sites on one strand of the DNA.