Pseudohypoparathyroidism type 1B (PHP1B) is a multihormone resistance disorder caused by aberrant methylation. Characteristic epigenetic changes at differentially methylated regions (DMRs), i.e., NESP, AS1, AS2, XL, and A/B, are associated with specific structural defects in different autosomal dominant PHP1B (AD-PHP1B) subtypes. However, mechanisms underlying abnormal methylation remain incompletely defined, largely because viable PHP1B mouse models are lacking. Using lymphoblastoid cells and induced pluripotent stem cells, we show that various methylation patterns in PHP1B reflect differential disruption of sense and antisense transcripts. In cases with broad methylation changes, loss of the maternal, sense-transcribed exon H/AS region impairs methylation of the AS1 DMR, which results in biallelic expression of an antisense transcript, , and NESP hypermethylation. In contrast, cases with normal AS1 methylation, including deletions, show monoallelic expression and normal NESP methylation. The roles of these transcripts were confirmed by a retrotransposon in intron 1, identified in an AD-PHP1B family. This insertion impaired exon H/AS transcription when located on the maternal allele, thus preventing the complete establishment of methylation at all maternal DMRs, leading to biallelic transcription. However, maternal transcription was profoundly attenuated, thus allowing only a small gain-of-methylation at NESP. Likewise, on the paternal allele, the retrotransposon attenuated transcription, thus preventing complete NESP methylation. Our findings support a model of bidirectional transcription-mediated regulation of methylation at DMRs and will help to refine systematic approaches for establishing molecular defects underlying different PHP1B subtypes.