There is increasing evidence for epigenetically mediated transgenerational inheritance across taxa. However, the evolutionary implications of such alternative mechanisms of inheritance remain unclear. Herein, we show that epigenetic mechanisms can serve two fundamentally different functions in transgenerational inheritance: (i) selection-based effects, which carry adaptive information in virtue of selection over many generations of reliable transmission; and (ii) detection-based effects, which are a transgenerational form of adaptive phenotypic plasticity. The two functions interact differently with a third form of epigenetic information transmission, namely information about cell state transmitted for somatic cell heredity in multicellular organisms. Selection-based epigenetic information is more likely to conflict with somatic cell inheritance than is detection-based epigenetic information. Consequently, the evolutionary implications of epigenetic mechanisms are different for unicellular and multicellular organisms, which underscores the conceptual and empirical importance of distinguishing between these two different forms of transgenerational epigenetic effect.