The past decade has seen an explosion of interest in the epigenetics of cancer, with an increasing understanding that this form of genomic modification plays a critical role in pathogenesis. The malignant phenotype results from a step-wise increase of both genetic abnormalities and epigenetic modifications, leading to dysregulation of critical genes controlling cell growth, differentiation and apoptosis. The methylation of CpG islands within gene promoters is a major epigenetic transcriptional control mechanism that is frequently dysregulated in human cancer. This phenomenon (methylation of CpG islands) plays a critical role in the transcriptional silencing of tumour suppressor genes in cancer and has prompted the development and testing of several demethylating agents aimed at reversing this process. Clinical trials using epigenetically targeted therapies have yielded particularly promising results in the myelodysplastic syndromes (MDS), in which tumour suppressor gene silencing by promoter methylation is a frequent event. Several genes and gene pathways disrupted by aberrant CpG island methylation have now been identified in haematological malignancies, the most frequently studied being the cell cycle inhibitors p16 (now termed CDKN2A; mostly methylated in lymphoid malignancy) and p15 (now termed CDKN2B; commonly methylated in lymphoid and myeloid malignancies). This review will discuss the role that aberrant gene silencing by promoter hypermethylation plays in the molecular pathogenesis of haematological malignancies and assess the clinical potential of demethylating agents for the management of patients.