Psoriasis is a chronic inflammatory immune-mediated disorder affecting the skin and other organs including joints. Over 1,300 transcripts are altered in psoriatic involved skin compared with normal skin. However, to our knowledge, global epigenetic profiling of psoriatic skin is previously unreported. Here, we describe a genome-wide study of altered CpG methylation in psoriatic skin. We determined the methylation levels at 27,578 CpG sites in skin samples from individuals with psoriasis (12 involved, 8 uninvolved) and 10 unaffected individuals. CpG methylation of involved skin differed from normal skin at 1,108 sites. Twelve mapped to the epidermal differentiation complex, upstream or within genes that are highly upregulated in psoriasis. Hierarchical clustering of 50 of the top differentially methylated (DM) sites separated psoriatic from normal skin samples with uninvolved skin exhibiting intermediate methylation. CpG sites where methylation was correlated with gene expression are reported. Sites with inverse correlations between methylation and nearby gene expression include those of KYNU, OAS2, S100A12, and SERPINB3, whose strong transcriptional upregulation is an important discriminator of psoriasis. Pyrosequencing of bisulfite-treated DNA from skin biopsies at three DM loci confirmed earlier findings and revealed reversion of methylation levels toward the non-psoriatic state after 1 month of anti-TNF-α therapy.