Environmental epigenetics is a rapidly growing field which studies the effects of environmental factors such as nutrition, stress, and exposure to compounds on epigenetic gene regulation. Recent studies have shown that exposure to toxicants in vertebrates is associated with changes in DNA methylation, a major epigenetic mechanism affecting gene transcription. Zebra fish, a well-known model in toxicology and developmental biology, are emerging as a model species in environmental epigenetics despite their evolutionary distance to rodents and humans. In this review, recent insights in DNA methylation during zebra fish development are discussed and compared to mammalian models in order to evaluate zebra fish as a model to study the role of DNA methylation in environmental toxicology. Differences exist in DNA methylation reprogramming during early development, whereas in later developmental stages, tissue distribution of both 5-methylcytosine and 5-hydroxymethylcytosine seems more conserved between species, as well as basic DNA (de)methylation mechanisms. All DNA methyl transferases identified so far in mammals are present in zebra fish, as well as a number of major demethylation pathways. However, zebra fish appear to lack some methylation pathways present in mammals, such as parental imprinting. Several studies report effects on DNA methylation in zebra fish following exposure to environmental contaminants, such as arsenic, benzo[a]pyrene, and tris(1,3-dichloro-2-propyl)phosphate. Though more research is needed to examine heritable effects of contaminant exposure on DNA methylation, recent data suggests the usefulness of the zebra fish as a model in environmental epigenetics.