DNA methylation occurs in CG and non-CG sequence contexts. Non-CG methylation is abundant in plants and is mediated by CHROMOMETHYLASE (CMT) and DOMAINS REARRANGED METHYLTRANSFERASE (DRM) proteins; however, its roles remain poorly understood. Here we characterize the roles of non-CG methylation in Arabidopsis thaliana. We show that a poorly characterized methyltransferase, CMT2, is a functional methyltransferase in vitro and in vivo. CMT2 preferentially binds histone H3 Lys9 (H3K9) dimethylation and methylates non-CG cytosines that are regulated by H3K9 methylation. We revealed the contributions and redundancies between each non-CG methyltransferase in DNA methylation patterning and in regulating transcription. We also demonstrate extensive dependencies of small-RNA accumulation and H3K9 methylation patterning on non-CG methylation, suggesting self-reinforcing mechanisms between these epigenetic factors. The results suggest that non-CG methylation patterns are critical in shaping the landscapes of histone modification and small noncoding RNA.