Bisulfite treatment of DNA followed by high-throughput sequencing (Bisulfite-seq) is an important method for studying DNA methylation and epigenetic gene regulation, yet current software tools do not adequately address single nucleotide polymorphisms (SNPs). Identifying SNPs is important for accurate quantification of methylation levels and for identification of allele-specific epigenetic events such as imprinting. We have developed a model-based bisulfite SNP caller, Bis-SNP, that results in substantially better SNP calls than existing methods, thereby improving methylation estimates. At an average 30× genomic coverage, Bis-SNP correctly identified 96% of SNPs using the default high-stringency settings. The open-source package is available at http://epigenome.usc.edu/publicationdata/bissnp2011.