Stem cells and multipotent progenitor cells face the challenge of balancing the stability and plasticity of their developmental states. Their self-renewal requires the maintenance of a defined gene-expression program, which must be stably adjusted towards a new fate upon differentiation. Recent data imply that epigenetic mechanisms can confer robustness to steady state gene expression but can also direct the terminal fate of lineage-restricted multipotent progenitor cells. Here, we review the latest models for how changes in chromatin and DNA methylation are regulated during cellular differentiation. We further propose that targets of epigenetic repression share common features in the sequences of their regulatory regions, thereby suggesting a co-evolution of epigenetic pathways and classes of cis-acting elements.