The oxysterol sulfate, 25-hydroxycholesterol 3-sulfate (25HC3S), has been shown to play an important role in lipid metabolism, inflammatory response, and cell survival. However, the mechanism(s) of its function in global regulation is unknown. The current study investigates the molecular mechanism by which 25HC3S functions as an endogenous epigenetic regulator. To study the effects of oxysterols/sterol sulfates on epigenetic modulators, 12 recombinant epigenetic enzymes were used to determine whether 25HC3S acts as their endogenous ligand. The enzyme kinetic study demonstrated that 25HC3S specifically inhibited DNA methyltransferases (DNMTs), DNMT1, DNMT3a, and DNMT3b with IC50 of 4.04, 3.03, and 9.05 × 10−6 M, respectively. In human hepatocytes, high glucose induces lipid accumulation by increasing promoter CpG methylation of key genes involved in development of nonalcoholic fatty liver diseases. Using this model, whole genome bisulfate sequencing analysis demonstrated that 25HC3S converts the 5mCpG to CpG in the promoter regions of 1,074 genes. In addition, we observed increased expression of the demethylated genes, which are involved in the master signaling pathways, including MAPK-ERK, calcium-AMP-activated protein kinase, and type II diabetes mellitus pathways. mRNA array analysis showed that the upregulated genes encoded for key elements of cell survival; conversely, downregulated genes encoded for key enzymes that decrease lipid biosynthesis. Taken together, our results indicate that the expression of these key elements and enzymes are regulated by the demethylated signaling pathways. We summarized that 25HC3S DNA demethylation of 5mCpG in promoter regions is a potent regulatory mechanism.