A methyl group deposited on cytosines incorporated into the sequence of the DNA, so called DNA methylation, decorates the genomes of a large number of species, from archaea to man. Over the last two decades, a large body of research discovered that this small chemical moiety elicits a profound effect on the gene expression program. In particular, DNA methylation restricts transcriptionally active regions of the genome, therefore ensuring a faithful interpretation of the regulatory information encoded in the DNA sequence. This fundamental role played by the methylation of DNA helps define cell identity at a molecular level, thus it enables a biologically complex transition such as from a zygote to an organism to occur in a unidirectional and orchestrated manner. Perturbations in the pattern of DNA methylation have been frequently found in pathological processes such as tumorigenesis. The pattern of DNA methylation decorating the genome of a cell is precisely copied during cell division by maintenance machinery composed of the DNMT1 enzyme and its associated proteins. The absence of DNMT1 elicits a wide-range of deleterious effects, from loss of cell fitness of in vitro cultured cells to embryonic lethality and loss of homeostasis of somatic tissues. Previous studies reported pleiotropic effects and mutually exclusive phenotypes of DNMT1 knockout depending on the design of the study – from apoptosis and genomic instability to accelerated cell cycle and trans-differentiation. How exactly these phenotypes arise in a response to DNMT1 deficiency is unknown. We employed the state-of-the-art next generation sequencing technologies and coupled them with molecular and cell biology techniques to elucidate the causes for the loss of fitness of DNMT1-deficient human embryonic stem cells. In contrast to previous studies, we did not observe the proposed DNA damage or genomic instability. Our work demonstrated that an acute depletion of DNMT1 results in a uniform decay of DNA methylation that we characterized in depth at a single cell level. Interestingly, our transcriptome profiling in single cells followed by functional validations revealed a change in the way how the transcriptional machinery interprets the genome in the absence of DNMT1. The loss of global DNA methylation without its maintenance machinery resulted in transcriptional changes mainly related to some gonad-specific genes and also a few genes encoding key players of a signaling transduction pathway. This finding inspired us to discover that the cells deficient for DNMT1 display a lower threshold for activating transcription once challenged with external stimuli. Our findings therefore provide new insights into how genome deficient for cytosine methylation becomes transcriptionally amenable, thus capable to integrate and respond to new signals from the environment. Our work lays a foundation for future studies on how such process leads to developmental defects and disease states.