The term "Epigenetics" refers to DNA and chromatin modifications that persist from one cell division to the next, despite a lack of change in the underlying DNA sequence. The "epigenome" refers to the overall epigenetic state of a cell, and serves as an interface between the environment and the genome. The epigenome is dynamic and responsive to environmental signals not only during development, but also throughout life; and it is becoming increasingly apparent that chemicals can cause changes in gene expression that persist long after exposure has ceased. Here we present the hypothesis that commonly-used pharmaceutical drugs can cause such persistent epigenetic changes. Drugs may alter epigenetic homeostasis by direct or indirect mechanisms. Direct effects may be caused by drugs which affect chromatin architecture or DNA methylation. For example the antihypertensive hydralazine inhibits DNA methylation. An example of an indirectly acting drug is isotretinoin, which has transcription factor activity. A two-tier mechanism is postulated for indirect effects in which acute exposure to a drug influences signaling pathways that may lead to an alteration of transcription factor activity at gene promoters. This stimulation results in the altered expression of receptors, signaling molecules, and other proteins necessary to alter genetic regulatory circuits. With more chronic exposure, cells adapt by an unknown hypothetical process that results in more permanent modifications to DNA methylation and chromatin structure, leading to enduring alteration of a given epigenetic network. Therefore, any epigenetic side-effect caused by a drug may persist after the drug is discontinued. It is further proposed that some iatrogenic diseases such as tardive dyskinesia and drug-induced SLE are epigenetic in nature. If this hypothesis is correct the consequences for modern medicine are profound, since it would imply that our current understanding of pharmacology is an oversimplification. We propose that epigenetic side-effects of pharmaceuticals may be involved in the etiology of heart disease, cancer, neurological and cognitive disorders, obesity, diabetes, infertility, and sexual dysfunction. It is suggested that a systems biology approach employing microarray analyses of gene expression and methylation patterns can lead to a better understanding of long-term side-effects of drugs, and that in the future, epigenetic assays should be incorporated into the safety assessment of all pharmaceutical drugs. This new approach to pharmacology has been termed "phamacoepigenomics", the impact of which may be equal to or greater than that of pharmacogenetics. We provide here an overview of this potentially major new field in pharmacology and medicine.