Multicellular eukaryotic genomes show enormous differences in size. A substantial part of this variation is due to the presence of transposable elements (TEs). They contribute significantly to a cell’s mass of DNA and have the potential to become involved in host gene control. We argue that the suppression of their activities by methylation of the C–phosphate–G (CpG) dinucleotide in DNA is essential for their long-term accommodation in the host genome and, therefore, to its expansion. An inevitable consequence of cytosine methylation is an increase in C-to-T transition mutations via deamination, which causes CpG loss. Cytosine deamination is often needed for TEs to take on regulatory functions in the host genome. Our study of the whole-genome sequences of 53 organisms showed a positive correlation between the size of a genome and the percentage of TEs it contains, as well as a negative correlation between size and the CpG observed/expected (O/E) ratio in both TEs and the host DNA. TEs are seldom found at promoters and transcription start sites, but they are found more at enhancers, particularly after they have accumulated C-to-T and other mutations. Therefore, the methylation of TE DNA allows for genome expansion and also leads to new opportunities for gene control by TE-based regulatory sites.