It is necessary to determine whether chemicals or drugs have the potential to pose a threat to human health. Research conducted over the last two decades has led to the paradigm that chemicals can cause cancer either by damaging DNA or by altering cellular growth, probably via receptor-mediated changes in gene expression. However, recent evidence suggests that gene expression can be altered markedly via several diverse epigenetic mechanisms that can lead to permanent or reversible changes in cellular behavior. Key molecular events underlying these mechanisms include the alteration of DNA methylation and chromatin, and changes in the function of cell surface molecules. Thus, for example, DNA methyltransferase enzymes together with chromatin-associated proteins such as histone modifying enzymes and remodelling factors can modify the genetic code and contribute to the establishment and maintenance of altered epigenetic states. This is relevant to many types of toxicity including but not limited to cancer. In this paper, we describe the potential for interplay between genetic alteration and epigenetic changes in cell growth regulation and discuss the implications for drug discovery and safety assessment.