Chromatin immunoprecipitation followed by sequencing (ChIP–seq) is a technique for genome-wide profiling of DNA-binding proteins, histone modifications or nucleosomes. Owing to the tremendous progress in next-generation sequencing technology, ChIP–seq offers higher resolution, less noise and greater coverage than its array-based predecessor ChIP–chip. With the decreasing cost of sequencing, ChIP–seq has become an indispensable tool for studying gene regulation and epigenetic mechanisms. In this Review, I describe the benefits and challenges in harnessing this technique with an emphasis on issues related to experimental design and data analysis. ChIP–seq experiments generate large quantities of data, and effective computational analysis will be crucial for uncovering biological mechanisms.