Over the past decade, it has become increasingly obvious that epigenetic mechanisms are an integral part of a multitude of brain functions that range from the development of the nervous system over basic neuronal functions to higher order cognitive processes. At the same time, a substantial body of evidence has surfaced indicating that several neurodevelopmental, neurodegenerative, and neuropsychiatric disorders are in part caused by aberrant epigenetic modifications. Because of their inherent plasticity, such pathological epigenetic modifications are readily amenable to pharmacological interventions and have thus raised justified hopes that the epigenetic machinery provides a powerful new platform for therapeutic approaches against these diseases. In this review, we give a detailed overview of the implication of epigenetic mechanisms in both physiological and pathological brain processes and summarize the state-of-the-art of "epigenetic medicine" where applicable. Despite, or because of, these new and exciting findings, it is becoming apparent that the epigenetic machinery in the brain is highly complex and intertwined, which underscores the need for more refined studies to disentangle brain-region and cell-type specific epigenetic codes in a given environmental condition. Clearly, the brain contains an epigenetic "hotspot" with a unique potential to not only better understand its most complex functions, but also to treat its most vicious diseases.