Digits shape is sculpted by interdigital programmed cell death during limb development. Here, we show that DNA breakage in the periphery of 5-methylcytosine nuclei foci of interdigital precursors precedes cell death. These cells showed higher genome instability than the digit-forming precursors when exposed to X-ray irradiation or local bone morphogenetic protein (BMP) treatments. Regional but not global DNA methylation differences were found between both progenitors. DNA-Methyl-Transferases (DNMTs) including DNMT1, DNMT3B and, to a lesser extent, DNMT3A, exhibited well-defined expression patterns in regions destined to degenerate, as the interdigital tissue and the prospective joint regions. Dnmt3b functional experiments revealed an inverse regulation of cell death and cartilage differentiation, by transcriptional regulation of key genes including Sox9, Scleraxis, p21 and Bak1, via differential methylation of CpG islands across their promoters. Our findings point to a regulation of cell death versus chondrogenesis of limb skeletal precursors based on epigenetic mechanisms.