DNA methylation is one of the most extensively studied epigenetic marks. It is involved in transcriptional gene silencing and plays important roles during mammalian development. Its perturbation is often associated with human diseases. In mammalian genomes, DNA methylation is a prevalent modification that decorates the majority of cytosines. It is found at the promoters and enhancers of inactive genes, at repetitive elements, and within transcribed gene bodies. Its presence at promoters is dynamically linked to gene activity, suggesting that it could directly influence gene expression patterns and cellular identity. The genome-wide distribution and dynamic behaviour of this mark have been studied in great detail in a variety of tissues and cell lines, including early embryonic development and in embryonic stem cells. In combination with functional studies, these genome-wide maps of DNA methylation revealed interesting features of this mark and provided important insights into its dynamic nature and potential functional role in genome regulation. In this review, we discuss how these recent observations, in combination with insights obtained from biochemical and functional genetics studies, have expanded our current knowledge about the regulation and context-dependent roles of DNA methylation in mammalian genomes.