In mammals, DNA methylation is a crucial epigenetic modification with key functions during development. Cellular processes that are regulated by DNA methylation comprise X chromosome inactivation, gene imprinting, genomic stability and transcriptional regulation. Generally, the methylation status of the majority of target sites is reliably propagated during mitosis. However, advances in genome-wide DNA methylation analysis at base-resolution have discovered a substantial amount of differential DNA methylation between normal cells of different tissue-origin. Moreover, aberrant DNA methylation changes are linked with a significant number of human diseases, particularly with cancer. Sites of differential and aberrant DNA methylation include regulatory DNA sequences, such as CpG islands in promoters and distal cis-regulatory elements, like enhancers. In this review, we will discuss novel aspects of DNA methylation dynamics, during normal development and in association with diseases.