Regulation of transcription occurs in a cell type specific manner orchestrated by epigenetic mechanisms including DNA methylation. Methylation changes may also play a key role in lineage specification during stem cell differentiation. To further our understanding of epigenetic regulation in chondrocytes we characterised the DNA methylation changes during chondrogenesis of mesenchymal stem cells (MSCs) by Infinium 450 K methylation array. Significant DNA hypomethylation was identified during chondrogenic differentiation including changes at many key cartilage gene loci. Integration with chondrogenesis gene expression data revealed an enrichment of significant CpGs in upregulated genes, while characterisation of significant CpG loci indicated their predominant localisation to enhancer regions. Comparison with methylation profiles of other tissues, including healthy and diseased adult cartilage, identified chondrocyte-specific regions of hypomethylation and the overlap with differentially methylated CpGs in osteoarthritis. Taken together we have associated DNA methylation levels with the chondrocyte phenotype. The consequences of which has potential to improve cartilage generation for tissue engineering purposes and also to provide context for observed methylation changes in cartilage diseases such as osteoarthritis.