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Over the past several years, there has been rapidly expanding evidence of epigenetic dysregulation in cancer, in which histone and DNA modification play a critical role in tumor growth and survival. These findings have gained the attention of the drug discovery and development community, and offer the potential for a second generation of cancer epigenetic agents for patients following the approved “first generation” of DNA methylation (e.g., Dacogen, Vidaza) and broad-spectrum HDAC inhibitors (e.g., Vorinostat, Romidepsin). This Review provides an analysis of prospects for discovery and development of novel cancer agents that target epigenetic proteins. We will examine key examples of epigenetic dysregulation in tumors as well as challenges to epigenetic drug discovery with emerging biology and novel classes of drug targets. We will also highlight recent successes in cancer epigenetics drug discovery and consider important factors for clinical success in this burgeoning area.