Tumor survival is significantly correlated with the immune response of patients. IFNG plays an important role in the tumor host response and decreased IFNG expression is often observed in lung cancer. Studies have shown that CpG island hypermethylation plays a critical role in transcriptional silencing of IFNG gene expression. However, there is limited understanding regarding the molecular mechanisms of altered methylation, and whether the tumor microenvironment has any effect on DNA methylation and IFNG production. In the current study, we demonstrate that plasma and intra-cellular IFNG levels are significantly lower in lung cancer patients. Hypermethylation of the IFNG promoter in CD4(+) T cells and plasma IFNG was negatively correlated. CD4(+) T cells from healthy individuals co-cultured with SPC-A1 cells generated lower levels of IFNG after activation, elevated expression of DNA methyltransferases (DNMTs), and exhibited hypermethylation of the IFNG promoter. In conclusion, decreased IFNG expression of CD4(+) T cells co-cultured with lung cancer cell is associated with IFNG promoter hypermethylation. Our study suggests that interaction between lung cancer cells and CD4(+) T cells induces DNMT expression and IFNG promoter hypermethylation in CD4(+) T cell, which may serve as an important mechanism of tumor-induced immunosuppression.