Modifications to DNA and histone tails represent key epigenetic marks involved in establishing and maintaining cell identity and can be dysregulated in human diseases, including cancer. Two such modifications, tri-methylation of lysine-27 on histone H3 (H3K27me3) mediated by the Polycomb complex and hydroxymethylation of cytosines on DNA, have recently been shown to be dynamically regulated during differentiation. Here, we show that global levels of 5-hydroxymethylcytosine (5hmC) and H3K27me3 are highly correlated across a variety of somatic tissues. In multiple hierarchically organized tissues, both marks showed almost identical cell-bycell distribution patterns that exhibited a tight association with differentiation. In particular, tissue stem cell compartments were characterized by low levels of both marks, whereas differentiated cell compartments exhibited high levels of 5hmC and H3K27me3. This pattern of correlation between the two marks could be recapitulated in an in vitro model system of induced differentiation in prostate epithelial cells. While the correlation between 5hmC and H3K27me3 levels is also maintained in human cancers, the degree of correlation is reduced. These findings suggest a previously unappreciated link between 5hmC and H3K27me3 regulation that should be explored in future mechanistic studies.