Pe'rigord black truffle (Tuber melanosporum Vittad.) is a gastronomic delicacy produced in southern Europe. The 125-megabase (Mb) genome of T. melanosporum is the largest sequenced fungal genome to date. In this project, we performed whole bisulfite sequencing on the fruit body and the free-living mycelium, and observed a mosaic pattern of DNA methylation across the genome. The methylation is mainly in transposons but absent in genes, indicating that the fungal DNA methylation system appears to be very different from plant and mammalian ones. We examined whether DNA methylation of transposons upstream of transcription start sites (TSS) affects the transcription of the associated genes. As a preliminary result, we found that transposons are less methylated in the vicinity of highly expressed genes compared to poorly expressed genes. This association is even stronger in LTR-transposons. While the methylation patterns are very similar in fruit body and mycelium, we identified several genes that are proximal to differentially methylated transposons, and have significantly differential expression.