Methylation of chromosomal DNA in animals and plants is a fundamental mechanism of epigenetic regulation, and the maize genome, with its diverse complement of transposons and repeats, is a paradigm for transgenerational mechanisms such as paramutation and imprinting. We have determined the genome-wide cytosine methylation map of two maize inbred lines, B73 and Mo17, at high coverage and at single nucleotide resolution. Transposon methylation is highest in CG (65%) and CHG (50%) contexts (where H = A, C or T), while methylation in CHH (5%) contexts is guided by 24nt small interfering RNA (siRNA), and not by 21-22nt siRNA. We have found that CG (8%) methylation seems to deter insertion of Mutator transposons into exons, while CHH and CHG methylation at splice donor and acceptor sites strongly inhibits RNA splicing. Methylation differences between parents are inherited in recombinant inbred lines, but methylation switches, guided by siRNA, are widespread and persist for up to 8 generations. These differences influence splicing, and recurrent switching suggest that paramutation is much more common than previously supposed, and may contribute to heterosis. Our results provide a comprehensive high resolution resource for maize genome methylation, as well as a map of recurrent transgenerational epigenetic shifts (paramutation) in the two most commonly used inbred maize lines. Overall design: Genome-wide cytosine methylation map in 2 maize strains by bisulfite sequencing, and RNA and small RNA profiles in the same tissue using Illumina platform.