Aberrant DNA methylation is associated with cancer development and progression. There are several types of specimens from which DNA methylation pattern can be measured and evaluated as an indicator of disease status (from normal biological process to pathologic condition) and even of pharmacologic response to therapy. Blood-based specimens such as cell-free circulating nucleic acid and DNA extracted from leukocytes in peripheral blood may be a potential source of noninvasive cancer biomarkers. In this article, we describe the characteristics of blood-based DNA methylation from different biological sources, detection methods, and the factors affecting DNA methylation. We provide a comprehensive literature review of blood-based DNA methylation as a cancer biomarker and focus on the study of DNA methylation using peripheral blood leukocytes. Although DNA methylation patterns measured in peripheral blood have great potential to be useful and informative biomarkers of cancer risk and prognosis, large systematic and unbiased prospective studies that consider biological plausibility and data analysis issues will be needed in order to develop a clinically feasible blood-based assay.