Epigenetics is the study of long term and stable but not necessarily heritable alterations in transcriptional potential and gene expression profile of a cell that are not due to any alterations in the DNA sequence. Epigenetic modifications include DNA methylation, posttranslational modifications of histone proteins and expression of small regulatory RNAs. In recent years, the role of epigenetic modifications in the development of hematological malignancies and drug resistance has been studied in depth and has shed light on this important issue. Here, we review the major epigenetic mechanisms that contribute to the generation and evolution of hematological malignancies and development of resistance to chemotherapy. We will also discuss the development of epigenetic drugs that can overcome resistance to conventional chemotherapy.