DNA methylation is an essential epigenetic mark whose role in gene regulation and its dependency on genomic sequence and environment are not fully understood. In this study we provide novel insights into the mechanistic relationships between genetic variation, DNA methylation and transcriptome sequencing data in three different cell-types of the GenCord human population cohort. We find that the association between DNA methylation and gene expression variation among individuals are likely due to different mechanisms from those establishing methylation-expression patterns during differentiation. Furthermore, cell-type differential DNA methylation may delineate a platform in which local inter-individual changes may respond to or act in gene regulation. We show that unlike genetic regulatory variation, DNA methylation alone does not significantly drive allele specific expression. Finally, inferred mechanistic relationships using genetic variation as well as correlations with TF abundance reveal both a passive and active role of DNA methylation to regulatory interactions influencing gene expression. DOI:http://dx.doi.org/10.7554/eLife.00523.001.