Methylation of lysines within histone proteins represents a posttranslational modification system that can have profound effects on gene expression. An evolutionarily conserved, but poorly understood, histone methylation mark occurs on lysine 79 on histone H3 (H3K79). The H3K79 methyltransferase, DOT1L, is involved in a number of key processes ranging from gene expression to DNA-damage response and cell cycle progression. Recently, DOT1L has also been implicated in the development of mixed lineage leukemia (MLL)-rearranged leukemia, where mistargeting of DOT1L causes aberrant H3K79 methylation at homeobox genes. As DOT1L is essential for leukemic transformation, small-molecule inhibitors of DOT1L function are an attractive therapeutic target for this type of leukemia. However, in order to develop safe treatments, it is necessary to also understand the biological functions of DOT1L. Here we review the various functions of DOT1L in normal mammalian development. Dot1L knockout is embryonic lethal in mice and is important for processes as diverse as proliferation of mouse embryonic stem cells, induced and natural reprogramming, cardiac development and chondrogenesis. Additionally, while an important role for DOT1L in embryonic hematopoiesis is clear, its role in postnatal hematopoiesis is less so. Establishing the precise function of DOT1L in normal adult hematopoiesis and understanding its mode of action will aid in our understanding of the use of DOT1L as a therapeutic target in MLL-rearranged leukemia.