Methylated DNA immunoprecipitation followed by high-throughput sequencing (MeDIP-seq) has the potential to identify changes in DNA methylation important in cancer development. In order to understand the role of epigenetic modulation in the development of acute myeloid leukemia (AML) we have applied MeDIP-seq to the DNA of 12 AML patients and 4 normal bone marrows. This analysis revealed leukemia-associated differentially methylated regions that included gene promoters, gene bodies, CpG islands and CpG island shores. Two genes (SPHKAP and DPP6) with significantly methylated promoters were of interest and further analysis of their expression showed them to be repressed in AML. We also demonstrated considerable cytogenetic subtype specificity in the methylomes affecting different genomic features. Significantly distinct patterns of hypomethylation of certain interspersed repeat elements were associated with cytogenetic subtypes. The methylation patterns of members of the SINE family tightly clustered all leukemic patients with an enrichment of Alu repeats with a high CpG density (P<0.0001). We were able to demonstrate significant inverse correlation between intragenic interspersed repeat sequence methylation and gene expression with SINEs showing the strongest inverse correlation (R(2) = 0.7). We conclude that the alterations in DNA methylation that accompany the development of AML affect not only the promoters, but also the non-promoter genomic features, with significant demethylation of certain interspersed repeat DNA elements being associated with AML cytogenetic subtypes. MeDIP-seq data were validated using bisulfite pyrosequencing and the Infinium array.