The major psychotic disorders schizophrenia and bipolar disorder are etiologically complex involving both heritable and nonheritable factors. The absence of consistently replicated major genetic effects, together with evidence for lasting changes in gene expression after environmental exposures, is consistent with the concept that the biologic underpinnings of these disorders are epigenetic in form rather than DNA sequence based. Psychosis-associated environmental exposures, particularly at key developmental stages, may result in long-lasting epigenetic alterations that impact on the neurobiological processes involved in pathology. Although direct evidence for epigenetic dysfunction in both schizophrenia and bipolar disorder is still limited, methodological technologies in epigenomic profiling have advanced. This means that we are at the exciting stage where it is feasible to start investigating molecular modifications to DNA and histones and examine the mechanisms by which environmental factors can act upon the genome to bring about epigenetic changes in gene expression involved in the etiology of these disorders. Given the dynamic nature of the epigenetic machinery and potential reversibility of epigenetic modifications, the understanding of such mechanisms is of key relevance for clinical psychiatry and for identifying new targets for prevention and/or intervention.