Methylation of DNA in combination with histone modifications establishes an epigenetic code that ensures the proper control of gene expression. Although DNA methyltransferases have been shown to interact with histone methyltransferases such as EZH2 (which methylates histone H3 on lysine 27) and G9a (which methylates histone H3 on lysine 9), the relationship between DNA methylation and repressive histone marks has not been fully studied. In cancer cells, promoters of genes are often aberrantly methylated. Accordingly, 5-azacytidine (a DNA demethylating drug) is used for treating patients with myelodysplastic syndrome. However, no genome-scale studies of the effects of this drug have been reported. In this work, we report the effects of 5-azacytidine on global gene expression and analyze ~24,000 human promoters using ChIP-chip to determine how 5-azacytidine treatment effects H3K27me3 and H3K9me3 levels. We found that (1) 5-azacytidine treatment results in large changes in gene regulation with distinct functional categories of genes showing increased (e.g. C2H2 zinc finger transcription factors) and decreased (e.g. genes involved in regulation of mitochondria and oxidoreductase activity) levels; (2) most genes that show altered expression are not regulated by promoters that display DNA methylation prior to the treatment; (3) certain gene classes switch their repression mark upon treatment with 5-azacytidine (from H3K27me3 to H3K9me3 and vice versa); and (4) most changes in gene expression are not due to relief of repression mediated by DNA or histone methylation.