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DNA methylation plays a crucial role in regulating gene expression, and its primary impact on transcription is that it often represses transcription. When DNA is methylated, particularly at cytosine bases in the context of cytosine-guanine (CpG) dinucleotides, the methyl groups can physically impede the binding of transcription factors and other necessary proteins that initiate transcription. This binding interference can prevent RNA polymerase from accessing the DNA, thus inhibiting the transcription of the associated genes.

Additionally, methylated DNA can attract proteins known as methyl-CpG binding proteins. These proteins can facilitate the formation of repressive chromatin structures, further discouraging the transcriptional machinery from engaging with the DNA. As a result, DNA methylation is a key mechanism of epigenetic regulation that is widely studied for its implications in processes such as development, cellular differentiation, and disease states, including cancer.

Methylation does not generally promote transcription, nor is it without effect, as it significantly influences gene activity. Moreover, while there may be some discussion around DNA methylation's relationship to mutation rates, this option does not directly pertain to its primary regulatory function in transcription.