DNA methylation of cytosines at CpG dinucleotides is a widespread epigenetic mark that is responsive to environmental exposures and associated with a wide range of human pathologies. However, compared to genetic variation, genome-wide epigenetic variation has been relatively unexplored due to the limited representation of variable CpGs on commercial high-throughput platforms. To address this gap, we developed a pipeline to identify high-value asthma- and allergy-associated CpGs among the >28 million CpG sites in the human genome. We focused on epithelial cells – sentinels in the airway that respond to inhaled microbes, pollution and allergens and mediate their downstream effects on asthma and allergic disease risk. We combined whole-genome bisulfite sequencing in these cells from children with and without allergic asthma and in silico evidence of functionality to identify high-value CpGs for a custom DNA methylation array. Compared to commercial arrays, the Asthma&Allergy Custom array was enriched for CpGs with intermediate methylation levels, which are more likely to be correlated with the expression of their nearest or target genes and associated with allergic sensitization in children of diverse ancestries compared to CpGs on the commercial array. Our study revealed signature features of functional CpGs and unveiled a wealth of DNA methylation variation at functional CpG sites that are missed by existing high-throughput arrays, indicating that inter-individual variation in DNA methylation may contribute more to disease risk than previously appreciated.The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.Significance StatementDNA methylation at CpG dinucleotides is a widespread epigenetic mark associated with both exposures and diseases, and with the expression of genes, in specific cell types. Yet, nearly all previous studies have been limited to the CpGs on commercial arrays, which represent <5% of the human methylome. We performed whole-genome bisulfite sequencing in airway epithelial cells from children with and without allergic asthma and used functional annotations of gene regulatory elements to design a custom Asthma&Allergy DNA methylation array. We identified signature features of high-value, functional CpGs that are associated with allergic sensitization and robust to ancestry. Our findings suggest that a large portion of the “functional” human methylome has been overlooked in previous epigenome-wide association studies.