DNA methylation is a stable epigenetic mark that can be inherited through multiple cell divisions. During development and cell differentiation, DNA methylation is dynamic, but some DNA methylation patterns may be retained as a form of epigenetic memory. DNA methylation profiles can be useful for the lineage classification and quality control of stem cells such as embryonic stem cells, induced pluripotent cells and mesenchymal stem cells. During cancer initiation and progression, genome-wide and gene-specific DNA methylation changes occur as a consequence of mutated or deregulated chromatin regulators. Early aberrant DNA methylation states occurring during transformation appear to be retained during tumor evolution. Similarly, DNA methylation differences among different regions of a tumor reflect the history of cancer cells and their response to the tumor microenvironment. Therefore, DNA methylation can be a useful molecular marker for cancer diagnosis and drug treatment.