Development from separate parental germ cells through fertilization and proceeding to a fully functioning adult animal occurs through an intricate program of transcriptional and chromatin changes. Epigenetic alterations such as DNA methylation are an important part of this process. This review looks at the role of DNA methylation in early embryonic development, as well as how this epigenetic mark affects stem cell differentiation and tissue-specific gene expression in somatic cells. Mol. Reprod. Dev. 77: 105–113, 2010. Published 2009 Wiley-Liss, Inc.