DNA methylation/demethylation constitutes a major consequence in all biological processes involving transcription, differentiation, development, DNA repair, recombination, and chromosome organization. Our earlier studies established that demethylation of CpG rich sequence by human DNA demethylase activity (5-methylcytosine-DNA glycosylase (5MeC-DNA glycosylase)) resembles "base excision DNA repair activity" and creates single-strand breaks on DNA that is associated with proliferating cell nuclear antigen (PCNA). Here in this report, we have identified differential DNA demethylation targets (hemi-methylated vs. fully-methylated) in normal cell lines and cancerous cell lines, and a shortened G(0)/G(1) resting time in cancerous cell lines than the normal cell lines. We have identified that in normal HFL1 fibroblast cell line, DNA demethylase activity targets hemi-methylated CpG specific sites on DNA. This normal cell line DNA demethylase activity associates with PCNA immune complex that is inhibited by CDKI proteins p21(waf1)/Gadd45alpha and Gadd45beta. While in cancerous LnCap and BT20 cell lines DNA demethylase activity targets fully-methylated CpG specific sites on DNA. This cancer cell line DNA demethylase activity is not associated with PCNA immune complex and is not inhibited by CDKI proteins p21(waf1)/Gadd45alpha and Gadd45beta. We have also identified that the fully-methylated CpG specific DNA demethylase activity from cancerous cell lines to associate with p300/CBP protein. These significant observations of variable targets of DNA demethylation and alternate partner proteins for DNA demethylase activity in cancerous cell lines are discussed in terms of double-strand DNA breaks versus single-strand DNA breaks and their role in the exit of G(1)/G(2) cell cycle stages. Also, the inability of cell cycle regulatory proteins like PCNA, p21(waf1), and Gadd45 to control DNA demethylase activity in cancerous cell lines is discussed in terms of accelerated G(1)/G(2) cell cycle stage exit to facilitate unregulated cellular proliferation, loss of control of chromosomal organization, and the development of oncogenesis in cancerous cell lines.