Background: Moraxella catarrhalis is a leading cause of otitis media (OM) and chronic obstructive pulmonary disease (COPD). M. catarrhalis contains a Type III DNA adenine methyltransferase (ModM) that is phase-variably expressed (i.e., its expression is subject to random, reversible ON/OFF switching). ModM has six target recognition domain alleles (modM1-6), and we have previously shown that modM2 is the predominant allele, while modM3 is associated with OM. Phase-variable DNA methyltransferases mediate epigenetic regulation and modulate pathogenesis in several bacteria. ModM2 of M. catarrhalis regulates the expression of a phasevarion containing genes important for colonization and infection. Here we describe the phase-variable expression of modM3, the ModM3 methylation site and the suite of genes regulated within the ModM3 phasevarion. Results: Phase-variable expression of modM3, mediated by variation in length of a 5′-(CAAC)n-3′ tetranucleotide repeat tract in the open reading frame was demonstrated in M. catarrhalis strain CCRI-195ME with GeneScan fragment length analysis and western immunoblot. We determined that ModM3 is an active N6-adenine methyltransferase that methylates the sequence 5′-ACm6ATC-3′. Methylation was detected at all 4446 5′-ACATC-3′ sites in the genome when ModM3 is expressed. RNASeq analysis identified 31 genes that are differentially expressed between modM3 ON and OFF variants, including five genes that are involved in the response to oxidative and nitrosative stress, with potential roles in biofilm formation and survival in anaerobic environments. An in vivo chinchilla (Chinchilla lanigera) model of otitis media demonstrated that transbullar challenge with the modM3 OFF variant resulted in an increased middle ear bacterial load compared to a modM3 ON variant. In addition, co-infection experiments with NTHi and M. catarrhalis modM3 ON or modM3 OFF variants revealed that phase variation of modM3 altered survival of NTHi in the middle ear during early and late stage infection. Conclusions: Phase variation of ModM3 epigenetically regulates the expression of a phasevarion containing multiple genes that are potentially important in the progression of otitis media.