DNA methylation is one of the best characterized epigenetic modifications. In mammals it is involved in various biological processes including the silencing of transposable elements, regulation of gene expression, genomic imprinting, and X-chromosome inactivation. This article describes how DNA methylation serves as a cellular memory system and how it is dynamically regulated through the action of the DNA methyltransferase (DNMT) and ten eleven translocation (TET) enzymes. Its role in the regulation of gene expression, through its interplay with histone modifications, is also described, and its implication in human diseases discussed. The exciting areas of investigation that will likely become the focus of research in the coming years are outlined in the summary.