Epigenetic modifications play a critical role in the development of pediatric and adult cancers, contributing to the cumulative changes observed as normal cells undergo malignant transformation. These modifications have been studied to develop epigenome‐targeted therapies and new diagnostic tools. The U.S. Food and Drug Administration has approved four epigenome‐targeted anticancer drugs. Two are drugs that inhibit DNA methyltransferases: azacitidine and decitabine, and two are drugs that inhibit histone deacetylases: vorinostat and romidepsin. These initial successes demonstrate the potential effectiveness of epigenome‐targeted therapies as monotherapy in hematologic malignancies, but newer studies are focused on combination therapy in many cancers. Epigenetic modifications have also been used to evaluate potential biomarkers to diagnose patients with cancer, identify patient populations likely to respond to specific anticancer therapies, and select reasonable dosages for investigational anticancer drugs, as observed with other newer targeted anticancer drugs. Although much has been learned about the relationship between the epigenome and cancer, many questions remain unanswered at this time. The next step is to continue to translate emerging epigenetic knowledge into anticancer drug development. In this review, we discuss the role of epigenetic modifications in the development of cancer and anticancer drug resistance, and we describe the progress and challenges associated with developing epigenome‐targeted anticancer drugs and diagnostic tools that identify epigenetic modifications.