Substitution of a methyl group in the 5-position of pyrimidines increases melting temperatures and modifies biological properties of DNA. Increased DNA stability is often attributed to hydrophobic interactions between water and the methyl group. However, we present evidence that the major effect of methyl substitution is to increase the molecular polarizability of the pyrimidine, thereby increasing the base stacking. Experimentally determined base stacking interaction constants for free bases in water are shown to correlate well with calculated molecular polarizability and DNA melting temperatures.