DNA methylation is a post-replication process by which cytosine residues in CpG sequences are methylated (methyltransferase add a methyl group as label), forming gene-specific methylation patterns.
Gene promoters labelled by CpG methylation impede transcription of genes regulated by them.
A defective DNA methylation machinery mostly leads to severe gene regulatory dysfunctions. For instance, the partial or complete loss of function of DNA-methyltransferase (Dnmt3b) causes immune deficiencies (e.g. ICF syndrome). Malfunctions of methyl recognition proteins are the causation of Rett-Syndrome.
Since promoter methylation impacts with gene regulation, both, hyper- and hypomethylation often underlie
tumour and cancer affections. Promoter hypermethylation of tumour suppressor genes give rise to cancerous deteriorations due to expression inhibition. On the other hand, promoter hypomethylation of oncogenes enhances their expression have the same cataclysmic outcome.
The promoters of house-keeping genes (constitutive genes, transcribed rather steadily; their products are required for maintenance of the cell; e.g. actin or ubiquitin) are characterised by CpG-rich islands, which are unmethylated irrespective of cell type, and thus accessible to transcription machinery. Contrary to that, promoters of tissue-specific genes are unmethylated solely in that tissue where they are transcribed. Elsewhere, they are inhibited due to promoter methylation. Thus, promoter methylation appears as common and efficient mechanism to silence genes.
Methylation patterns are established in the embryo, since
inherited from the parents, and during life span, fine-tuned by specific demethylation, giving rise to gene, tissue and even cell-specific methylation patterns. DNA-methylation is clonally inherited, as a maintenance methylase duplicates the methylation pattern from the parental to the progeny allele.

Unequal DNA-methylation was observed even in monozygotic twins. Methylation pattern are changing
with age (left: 1-year old twins, right: 50-year old twins) and are tightly linked with lifestyle (green =
hypermethylation, red = hypomethylation
For further information visit:
Fraga et al. Epigenetic differences arise during the lifetime of monozygotic twins. PNAS 102 (30), 10604-5 (2005) The Life Extension magazineDNA methylation had been suggested as suitable candidate for imprinting since it can be obtained by de-novo methylation, erased by demethylation and maintained by maintenance methylation (read also about
Genomic imprinting).