Chromatin remodeling mediated by DNA methylation and histone modifications play critical roles in the transcriptional regulation of protein-coding genes, noncoding RNAs such as microRNAs, and endogenous retroviruses (ERVs). Many studies have shown that aberrant DNA methylation and histone modifications are associated with the initiation and progression of various malignancies. Epigenetic silencing of tumor suppressor genes in cancer is generally mediated by DNA hypermethylation of CpG island promoters and histone modifications such as histone deacetylation, methylation of histone H3 lysine 9 (H3K9), and trimethylation of H3K27. Chromatin-modifying drugs such as DNA methylation inhibitors and histone deacetylase inhibitors have clinical promise for cancer therapy. However, details of the mechanisms responsible for the antitumor effects of these drugs have been unclear. Recently, a new molecular mechanism for the antitumor effect of DNA methylation inhibitors has been proposed: induction of interferon-responsive genes via double-stranded RNAs derived from ERVs. We have also confirmed the same effect of DNA demethylation using a 3D culture system for stem cells known as organoid culture. Our findings indicated that DNA demethylation suppresses the proliferation of cancer-initiating cells by inducing an antiviral response, including activation of interferon-responsive genes. Treatment with DNA methylation inhibitors to activate a growth-inhibiting immune response may be an effective therapeutic approach for malignant disorders.