DNA methylation, mediated by the combined action of three DNA methyltransferases (DNMT1, DNMT3A, and DNMT3B), is essential for mammalian development and is a major contributor to cellular transformation. To elucidate how DNA methylation is targeted, we mapped the genome-wide localization of all DNMTs and methylation, and examined the relationships among these markers, histone modifications, and nucleosome structure in a pluripotent human tumor cell line in its undifferentiated and differentiated states. Our findings reveal a strong link between DNMTs and transcribed loci, and that DNA methylation is not a simple sum of DNMT localization patterns. A comparison of the epigenomes of normal and cancerous stem cells, and pluripotent and differentiated states shows that the presence of at least two DNMTs is strongly associated with loci targeted for DNA hypermethylation. Taken together, these results shed important light on the determinants of DNA methylation and how it may become disrupted in cancer cells.