DNA methylation is an epigenetic mechanism in which the methyl group is covalently coupled to the C5 position of the cytosine residue of CpG dinucleotides. DNA methylation generally leads to gene silencing and is catalyzed by a group of enzymes known as DNA methyltransferases (Dnmt). During development, the epigenome undergoes waves of demethylation and methylation changes. As a result, there are cell type/tissue-specific DNA methylation patterns. Since DNA methylation changes only happen during DNA replication to maintain methylation patterns on hemimethylated DNA or establish new methylation, Dnmt expression generally decreases greatly after cell division. However, significant levels of Dnmts were noticed specifically in postmitotic neurons, suggesting a functional importance of Dnmt in the nervous system. Accumulating evidence showed that DNA methylation correlates with certain neuropsychiatric disorders such as schizophrenia, Rett syndrome, and ICF syndrome. Studies of methyl-CpG-binding proteins, Dnmt inhibitors, and Dnmt knockout mice also explored the key role of DNA methylation in neural development, plasticity, learning, and memory. Though an enzyme exhibiting DNA demethylation capability in vertebrates still remains to be identified, DNA methylation status in the CNS appeared to be reversible at certain genomic loci. This supports a maintenance role of Dnmt to prevent active demethylation in postmitotic neurons. Taken together, DNA methylation provides an epigenetic mechanism of gene regulation in neural development, function, and disorders.