DNA methylation is an important epigenetic mark that regulates gene expression. Dnmt1 plays an important role in maintaining DNA methylation patterns on daughter DNA strands. Studies have shed light into the functional role of Dnmt1 regulation in the hematopoietic and epidermal systems. Here we show that Dnmt1 is required for myogenesis. Loss of Dnmt1 results in reduced expression of myogenic genes and defects in myogenic differentiation. We have utilized a conditional knockout mouse approach to examine the functional consequences of Dnmt1 depletion specifically in the developing muscle. These mice were born runted, with smaller body weights, and reduced ability to form myotubes in vitro. We show that expression of Id-1, a negative regulator of myogenesis, is enhanced in Dnmt1-deficient cultures, leading to enhanced transdifferentiation of myoblasts toward the osteogenic lineage. Thus, these studies demonstrate that Dnmt1 influences cellular identity and determines lineage fidelity.