An integrative functional genomics study of multiple forms of data are vital for discovering molecular drivers of cancer development and progression. Here, we present an integrated genomic strategy utilizing DNA methylation and transcriptome profile data to discover epigenetically regulated genes implicated in cancer development and invasive progression. More specifically, this analysis identified fibromodulin (FMOD) as a glioblastoma (GBM) upregulated gene because of the loss of promoter methylation. Secreted FMOD promotes glioma cell migration through its ability to induce filamentous actin stress fiber formation. Treatment with cytochalasin D, an actin polymerization inhibitor, significantly reduced the FMOD-induced glioma cell migration. Small interfering RNA and small molecule inhibitor-based studies identified that FMOD-induced glioma cell migration is dependent on integrin-FAK-Src-Rho-ROCK signaling pathway. FMOD lacking C-terminus LRR11 domain (ΔFMOD), which does not bind collagen type I, failed to induce integrin and promote glioma cell migration. Further, FMOD-induced integrin activation and migration was abrogated by a 9-mer wild-type peptide from the FMOD C-terminus. However, the same peptide with mutation in two residues essential for FMOD interaction with collagen type I failed to compete with FMOD, thus signifying the importance of collagen type I-FMOD interaction in integrin activation. Chromatin immunoprecipitation-PCR experiments revealed that transforming growth factor beta-1 (TGF-β1) regulates FMOD expression through epigenetic remodeling of FMOD promoter that involved demethylation and gain of active histone marks with a simultaneous loss of DNMT3A and EZH2 occupancy, but enrichment of Sma- and Mad-related protein-2 (SMAD2) and CBP. FMOD silencing inhibited the TGF-β1-mediated glioma cell migration significantly. In univariate and multivariate Cox regression analysis, both FMOD promoter methylation and transcript levels predicted prognosis in GBM. Thus, this study identified several epigenetically regulated alterations responsible for cancer development and progression. Specifically, we found that secreted FMOD as an important regulator of glioma cell migration downstream of TGF-β1 pathway and forms a potential basis for therapeutic intervention in GBM.