Histone methylation can occur at various sites in histone proteins, primarily on lysine and arginine residues, and it can be governed by multiple positive and negative regulators, even at a single site, to either activate or repress transcription. It is now apparent that histone methylation is critical for almost all stages of development, and its proper regulation is essential for ensuring the coordinated expression of gene networks that govern pluripotency, body patterning and differentiation along appropriate lineages and organogenesis. Notably, developmental histone methylation is highly dynamic. Early embryonic systems display unique histone methylation patterns, prominently including the presence of bivalent (both gene-activating and gene-repressive) marks at lineage-specific genes that resolve to monovalent marks during differentiation, which ensures that appropriate genes are expressed in each tissue type. Studies of the effects of methylation on embryonic stem cell pluripotency and differentiation have helped to elucidate the developmental roles of histone methylation. It has been revealed that methylation and demethylation of both activating and repressive marks are essential for establishing embryonic and extra-embryonic lineages, for ensuring gene dosage compensation via genomic imprinting and for establishing body patterning via HOX gene regulation. Not surprisingly, aberrant methylation during embryogenesis can lead to defects in body patterning and in the development of specific organs. Human genetic disorders arising from mutations in histone methylation regulators have revealed their important roles in the developing skeletal and nervous systems, and they highlight the overlapping and unique roles of different patterns of methylation in ensuring proper development.