Research in cancer epigenomics is driven by the development of novel technologies and the utilization of model organisms ranging from yeasts to plants to vertebrates. For decades, the search for cancer genes has focused on genetic defects that were used as tags for identification of these genes. With the realization that epigenetic modifications, most importantly DNA methylation events, are frequently involved in transcriptional changes in both tumor suppressor genes and oncogenes, techniques have been developed that support the identification of novel cancer genes altered by DNA methylation alone or in combination with genetic events. Recent data demonstrate that, in addition to DNA methylation, chromatin modifications are also involved in gene regulation. We are now beginning to understand this interesting interplay between chromatin modifications, DNA methylation and gene regulation. This review will summarize our current knowledge of DNA methylation and histone modification in normal cells, introduce emerging concepts that show the intimate link between DNA methylation and chromatin modifications, and highlight recent advancements in our understanding of aberrant DNA methylation, with special emphasis on genome-wide hypermethylation.