Epigenetic changes, including CpG island hypermethylation, occur frequently in bladder cancer (BC) and may be exploited for BC detection and distinction between high-grade (HG) and low-grade (LG) disease. Genome-wide methylation analysis was performed using Agilent Human CpG Island Microarrays to determine epigenetic differences between LG and HG cases. Pathway enrichment analysis and functional annotation determined that the most frequently methylated pathways in HG BC were enriched for anterior/posterior pattern specification, embryonic skeletal system development, neuron fate commitment, DNA binding, and transcription factor activity. We identified 990 probes comprising a 32-gene panel that completely distinguished LG from HG based on methylation. Selected genes from this panel, EOMES, GP5, PAX6, TCF4, and ZSCAN12, were selected for quantitative polymerase chain reaction–based validation by MethyLight in an independent series (n = 84) of normal bladder samples and LG and HG cases. GP5 and ZSCAN12, two novel methylated genes in BC, were significantly hypermethylated in HG versus LG BC (P ≤ .03). We validated our data in a second independent cohort of LG and HG BC cases (n = 42) from The Cancer Genome Atlas (TCGA). Probes representing our 32-gene panel were significantly differentially methylated in LG versus HG tumors (P ≤ .04). These results indicate the ability to distinguish normal tissue from cancer, as well as LG from HG, based on methylation and reveal important pathways dysregulated in HG BC. Our findings were corroborated using publicly available data sets from TCGA. Ultimately, the creation of a methylation panel, including GP5 and ZSCAN12, able to distinguish between disease phenotypes will improve disease management and patient outcomes.