DNA methylation (DNAme) is a key epigenetic mark that regulates critical biological processes maintaining overall genome stability. Given its pleiotropic function, studies of DNAme dynamics are crucial, but currently available tools to interfere with DNAme have limitations and major cytotoxic side effects. Here, we present cell models that allow inducible and reversible DNAme modulation through DNMT1 depletion. By dynamically assessing whole genome and locus-specific effects of induced passive demethylation through cell divisions, we reveal a cooperative activity between DNMT1 and DNMT3B, but not of DNMT3A, to maintain and control DNAme. We show that gradual loss of DNAme is accompanied by progressive and reversible changes in heterochromatin, compartmentalization, and peripheral localization. DNA methylation loss coincides with a gradual reduction of cell fitness due to G1 arrest, with minor levels of mitotic failure. Altogether, this system allows DNMTs and DNA methylation studies with fine temporal resolution, which may help to reveal the etiologic link between DNAme dysfunction and human disease.