Using the paradigm of in vitro differentiation of hESCs/iPSCs into retinal pigment epithelial (RPE) cells, we have recently profiled mRNA and miRNA transcriptomes to define a set of RPE mRNA and miRNA signature genes implicated in directed RPE differentiation. In this study, in order to understand the role of DNA methylation in RPE differentiation, we profiled genome-scale DNA methylation patterns using the method of reduced representation bisulfite sequencing (RRBS). We found dynamic waves of de novo methylation and demethylation in four stages of RPE differentiation. Integrated analysis of DNA methylation and RPE transcriptomes revealed a reverse-correlation between levels of DNA methylation and expression of a subset of miRNA and mRNA genes that are important for RPE differentiation and function. Gene Ontology (GO) analysis suggested that genes undergoing dynamic methylation changes were related to RPE differentiation and maturation. We further compared methylation patterns among human ESC- and iPSC-derived RPE as well as primary fetal RPE (fRPE) cells, and discovered that specific DNA methylation pattern is useful to classify each of the three types of RPE cells. Our results demonstrate that DNA methylation may serve as biomarkers to characterize the cell differentiation process during the conversion of human pluripotent stem cells into functional RPE cells.