DNA methylation is a conserved epigenetic mark that plays important roles in maintaining genome stability and regulating gene expression. As sessile organisms, plants have evolved sophisticated regulatory systems to endure or respond to diverse adverse abiotic environmental challenges, i.e., abiotic stresses, such as extreme temperatures (cold and heat), drought and salinity. Plant stress responses are often accompanied by changes in chromatin modifications at diverse responsive loci, such as 5-methylcytosine (5mC) and N6-methyladenine (6mA) DNA methylation. Some abiotic stress responses are memorized for several hours or days through mitotic cell divisions and quickly reset to baseline levels after normal conditions are restored, which is referred to as somatic memory. In some cases, stress-induced chromatin marks are meiotically heritable and can impart the memory of stress exposure from parent plants to at least the next stress-free offspring generation through the mechanisms of transgenerational epigenetic inheritance, which may offer the descendants the potential to be adaptive for better fitness. In this review, we briefly summarize recent achievements regarding the establishment, maintenance and reset of DNA methylation, and highlight the diverse roles of DNA methylation in plant responses to abiotic stresses. Further, we discuss the potential role of DNA methylation in abiotic stress-induced somatic memory and transgenerational inheritance. Future research directions are proposed to develop stress-tolerant engineered crops to reduce the negative effects of abiotic stresses.