DNA methylation provides a major epigenetic code (besides histone modification) of the lineage- and development-specific genes (such as regulators of differentiation in the hematopoietic lineages) that control expression of normal cells. However, DNA methylation is also involved in malignancies because aberrant methylating gene activity occurs during leukemic transformation. Thus, genes such as tumor suppressor genes, growth-regulatory genes, and adhesion molecules are often silenced in various hematopoietic malignancies by epigenetic inactivation via DNA hypermethylation. This inactivation is frequently seen not only in transformed cell lines but also in primary leukemia cells. Because this defect is amenable to reversion by pharmacologic means, agents that inhibit DNA methylation have been developed to specifically target this hypermethylation defect in leukemia and preleukemia cases. The most clinically advanced agents, the azanucleosides 5-azacytidine and 5-aza-2'-deoxycytidine (decitabine), were discovered more than 25 years ago, when their methylation-inhibitory activities, even at low concentrations, became apparent. Although both of these agents, like cytarabine, had been clinically used until then at high doses, the redevelopment of these agents for low-dose schedules has revealed very interesting clinical activities for treating myelodysplasia (MDS) and acute myeloid leukemia (AML). Because these diseases occur mostly in patients over 60 years of age, low-dose schedules with these compounds provide a very promising approach in such patient groups by virtue of their low nonhematologic toxicity profiles. In the present review, we describe the development of treatments that target DNA hypermethylation in MDS and AML, and clinical results are presented. In addition, pharmacologic DNA demethylation may be viewed as a platform for biological modification of malignant cells to become sensitized (or resensitized) to secondary signals, such as differentiating signals (retinoids, vitamin D3) and hormonal signals (eg, estrogen receptor in breast cancer cells, androgen receptor in prostate cancer cells). Finally, an in vitro synergism between the reactivating potency of demethylating agents and inhibitors of histone deacetylation has been tested in several pilot studies of AML and MDS treatment. Finally, gene reactivation by either group of compounds results in therapeutically meaningful reactivation of fetal hemoglobin in patients with severe hemoglobinopathies, extending the therapeutic range of derepressive epigenetic agents to nonmalignant hematopoietic disorders.