Small cell lung cancer (SCLC) is a disease characterized by aggressive clinical behavior and lack of effective therapy. Owing to its tendency for early dissemination, only a third of patients have limited-stage disease at the time of diagnosis. SCLC is thought to derive from pulmonary neuroendocrine cells. Although several molecular abnormalities in SCLC have been described, there are relatively few studies on epigenetic alterations in this type of tumor. Here, we have used methylation profiling with the methylated-CpG island recovery assay in combination with microarrays and conducted the first genome-scale analysis of methylation changes that occur in primary SCLC and SCLC cell lines. Among the hundreds of tumor-specifically methylated genes discovered, we identified 73 gene targets that are methylated in >77% of primary SCLC tumors, most of which have never been linked to aberrant methylation in tumors. These methylated targets have potential for biomarker development for early detection and therapeutic management of SCLC. SCLC cell lines had a greater number of hypermethylated genes than primary tumors. Gene ontology analysis indicated a significant enrichment of methylated genes functioning as transcription factors and in processes of neuronal differentiation. Motif analysis of tumor-specific methylated regions identified enrichment of binding sites for several neural cell fate-specifying transcription factors including NEUROD1, HAND1, ZNF423 and REST. We hypothesize that two potential mechanisms, loss of cell fate-determining transcription factors by methylation of their promoters and functional inactivation of their corresponding genomic-binding sites by DNA methylation, can promote a differentiation defect of neuroendocrine cells thus enhancing the ability of tumor progenitor cells to transition toward SCLC.