Epigenetics confers the heritable variations with no DNA sequence changes, including DNA methylation and histone modification. Cytosine methylation is an essential feature of epigenetic regulation and is involved in various biological processes. Although cytosine methylation has been analysed at the genomic scale for several plant species, there is a general lack of understanding of the dynamics of global and genic DNA methylation in plants growing in environments challenged with biotic and abiotic stresses. In this study, we mapped cytosine methylation at single-base resolution in the genome of commercial apple (Malus domestica), and analysed changes in methylation patterns associated with water deficit in representative drought-sensitive and drought-tolerant cultivars. We found that the apple genome exhibits ~54%, ~38% and ~8.5% methylation at CG, CHG and CHH sequence contexts, respectively. We additionally documented changes in gene expression associated methylation levels under water deficit. Global methylation and transcription analysis revealed that promoter-unmethylated genes showed higher expression levels than promoter-methylated genes. Gene body methylation appears to be positively correlated with gene expression. Water deficit stress was associated with changes in methylation at a multitude of genes, including those encoding transcription factors (TFs) and transposable elements (TEs). Based on the methylome data, we found that MdOCP3（OVEREXPRESSOR OF CATIONIC PEROXIDASE 3）transcription factor presented a demethylation trend under drought stress and its expression level was up-regulated. Then, over-expression of MdOCP3 in tobacco and apple showed its negative regulatory role in response to drought. These data will be helpful for understanding potential linkages between DNA methylation and gene expression in plants growing in natural environments and challenged with abiotic and biotic stresses.