Both DNA methylation and histone modification are involved in establishing patterns of gene repression during development. Certain forms of histone methylation cause local formation of heterochromatin, which is readily reversible, whereas DNA methylation leads to stable long-term repression. It has recently become apparent that DNA methylation and histone modification pathways can be dependent on one another, and that this crosstalk can be mediated by biochemical interactions between SET domain histone methyltransferases and DNA methyltransferases. Relationships between DNA methylation and histone modification have implications for understanding normal development as well as somatic cell reprogramming and tumorigenesis.