DNA methylation is a well-studied epigenetic modification essential for efficient cellular differentiation. Aberrant DNA methylation patterns are a characteristic feature of cancer, including myeloid malignancies such as acute myeloid leukemia. Recurrent mutations in DNA-modifying enzymes were identified in acute myeloid leukemia and linked to distinct DNA methylation signatures. In addition, discovery of Tet enzymes provided new mechanisms for the reversal of DNA methylation. Advances in base-resolution profiling of DNA methylation have enabled a more comprehensive understanding of the methylome landscape in the genome. This review will summarize and discuss the key questions in the function of DNA methylation in the hematopoietic system, including where and how DNA methylation regulates diverse biological processes in the genome as elucidated by recent studies.