The successful establishment and stable maintenance of cell identity are critical for organismal development and tissue homeostasis. Cell identity is provided by epigenetic mechanisms that facilitate a selective readout of the genome. Operating at the level of chromatin, they establish defined gene expression programs during cell differentiation. Among the epigenetic modifications in mammalian chromatin, the 5'-methylation of cytosine in CpG dinucleotides is unique in that it affects the DNA rather than histones and the biochemistry of the DNA methylating enzymes offers a mechanistic explanation for stable inheritance. Yet, DNA methylation states appear to be more dynamic and their maintenance more complex than existing models predict. Also, methylation patterns are by far not always faithfully inherited, as best exemplified by human cancers. Often, these show widespread hypo- or hypermethylation across their genomes, reflecting an underlying epigenetic instability that may have contributed to carcinogenesis. The phenotype of unstable methylation in cancer illustrates the importance of quality control in the DNA methylation system and implies the existence of proof-reading mechanisms that enforce fidelity to DNA methylation in healthy tissue. Fidelity seems particularly important in islands of unmethylated CpG-rich sequences where an accurate maintenance of un- or differentially methylated states is critical for stable expression of nearby genes. Methylation proof-reading in such sequences requires a system capable of recognition and active demethylation of erroneously methylated CpGs. Active demethylation of 5-methylcytosine has been known to occur for long, but the underlying mechanisms have remained enigmatic and controversial. However, recent progress in this direction substantiates a role of DNA repair in such processes. This review will address general aspects of cytosine methylation stability in mammalian DNA and explore a putative role of DNA repair in methylation control.