Epigenetic alterations are fundamental hallmarks of cancer genomes. We surveyed the landscape of DNA methylation alterations in gastric cancer by analyzing genome-wide CG dinucleotide (CpG) methylation profiles of 240 gastric cancers (203 tumors and 37 cell lines) and 94 matched normal gastric tissues. Cancer-specific epigenetic alterations were observed in 44% of CpGs, comprising both tumor hyper- and hypomethylation. Twenty-five percent of the methylation alterations were significantly associated with changes in tumor gene expression. Whereas most methylation-expression correlations were negative, several positively correlated methylation-expression interactions were also observed, associated with CpG sites exhibiting atypical transcription start site distances and gene body localization. Methylation clustering of the tumors revealed a CpG island methylator phenotype (CIMP) subgroup associated with widespread hypermethylation, young patient age, and adverse patient outcome in a disease stage-independent manner. CIMP cell lines displayed sensitivity to 5-aza-2'-deoxycytidine, a clinically approved demethylating drug. We also identified long-range regions of epigenetic silencing (LRESs) in CIMP tumors. Combined analysis of the methylation, gene expression, and drug treatment data suggests that certain LRESs may silence specific genes within the region, rather than all genes. Finally, we discovered regions of long-range tumor hypomethylation, associated with increased chromosomal instability. Our results provide insights into the epigenetic impact of environmental and biological agents on gastric epithelial cells, which may contribute to cancer.