The recent discovery that a small number of defined factors are sufficient to reprogram somatic cells into pluripotent stem cells has significantly expanded our knowledge of the plasticity of the epigenome. In this review we discuss some aspects of cell fate plasticity and epigenetic alterations, with emphasis on DNA methylation during cellular reprogramming. Recent data suggest that DNA methylation is a major barrier to induced pluripotent stem (iPS) cell reprogramming. The demethylating agent 5-azacytidine can enhance the efficiency of iPS cells generation and the putative DNA demethylase protein activation-induced cytidine deaminase (AID/AICDA) can erase DNA methylation at pluripotency gene promoters, thereby allowing cellular reprogramming. Elucidation of the epigenetic changes taking place during cellular reprogramming will enhance our understanding of stem cell biology and facilitate therapeutic applications.