DNA methylation is an essential mechanism controlling gene expression during differentiation and development. We investigated the epigenetic regulation of the nuclear-encoded, mitochondrial DNA (mtDNA) polymerase γ catalytic subunit (PolgA) by examining the methylation status of a CpG island within exon 2 of PolgA. Bisulphite sequencing identified low methylation levels (<10%) within exon 2 of mouse oocytes, blastocysts and embryonic stem cells (ESCs), while somatic tissues contained significantly higher levels (>40%). In contrast, induced pluripotent stem (iPS) cells and somatic nuclear transfer ESCs were hypermethylated (>20%), indicating abnormal epigenetic reprogramming. Real time PCR analysis of 5-methylcytosine (5mC) and 5-hydroxymethylcytosine (5hmC) immunoprecipitated DNA suggests active DNA methylation and demethylation within exon 2 of PolgA. Moreover, neural differentiation of ESCs promoted de novo methylation and demethylation at the exon 2 locus. Regression analysis demonstrates that cell-specific PolgA expression levels were negatively correlated with DNA methylation within exon 2 and mtDNA copy number. Finally, using chromatin immunoprecipitation (ChIP) against RNA polymerase II (RNApII) phosphorylated on serine 2, we show increased DNA methylation levels are associated with reduced RNApII transcriptional elongation. This is the first study linking nuclear DNA epigenetic regulation with mtDNA regulation during differentiation and cell specialization.