Recent technology has made it possible to measure DNA methylation profiles in a cost-effective and comprehensive genome-wide manner using array-based technology for epigenome-wide association studies. However, identifying differentially methylated regions (DMRs) remains a challenging task because of the complexities in DNA methylation data. Supervised methods typically focus on the regions that contain consecutive highly significantly differentially methylated CpGs in the genome, but may lack power for detecting small but consistent changes when few CpGs pass stringent significance threshold after multiple comparison. Unsupervised methods group CpGs based on genomic annotations first and then test them against phenotype, but may lack specificity because the regional boundaries of methylation are often not well defined. We present coMethDMR, a flexible, powerful, and accurate tool for identifying DMRs. Instead of testing all CpGs within a genomic region, coMethDMR carries out an additional step that selects co-methylated sub-regions first. Next, coMethDMR tests association between methylation levels within the sub-region and phenotype via a random coefficient mixed effects model that models both variations between CpG sites within the region and differential methylation simultaneously. coMethDMR offers well-controlled Type I error rate, improved specificity, focused testing of targeted genomic regions, and is available as an open-source R package.