Abstract Background The role of cytokines in establishing specific transcriptional programmes in innate immune cells has long been recognized. However, little is known about how these extracellular factors instruct innate immune cell epigenomes to engage specific differentiation states. Human monocytes differentiate under inflammatory conditions into effector cells with non-redundant functions, such as dendritic cells and macrophages. In this context, interleukin 4 (IL-4) and granulocyte macrophage colony-stimulating factor (GM-CSF) drive dendritic cell differentiation, whereas GM-CSF alone leads to macrophage differentiation. Results Here, we investigate the role of IL-4 in directing functionally relevant dendritic-cell-specific DNA methylation changes. A comparison of DNA methylome dynamics during differentiation from human monocytes to dendritic cells and macrophages identified gene sets undergoing dendritic-cell-specific or macrophage-specific demethylation. Demethylation is TET2-dependent and is essential for acquiring proper dendritic cell and macrophage identity. Most importantly, activation of the JAK3-STAT6 pathway, downstream of IL-4, is required for the acquisition of the dendritic-cell-specific demethylation and expression signature, following STAT6 binding. A constitutively activated form of STAT6 is able to bypass IL-4 upstream signalling and instruct dendritic-cell-specific functional DNA methylation changes. Conclusions Our study is the first description of a cytokine-mediated sequence of events leading to direct gene-specific demethylation in innate immune cell differentiation.