Chromatin immunoprecipitation followed by sequencing (ChIP-seq) is a technique for genome-wide profiling of DNA-binding proteins, histone modifications or nucleosomes. Owing to the tremendous progress in next-generation sequencing technology, ChIP-seq offers higher resolution, less noise and greater coverage than its array-based predecessor ChIP-chip. With the decreasing cost of sequencing, ChIP-seq has become an indispensable tool for studying gene regulation and epigenetic mechanisms. In this Review, I describe the benefits and challenges in harnessing this technique with an emphasis on issues related to experimental design and data analysis. ChIP-seq experiments generate large quantities of data, and effective computational analysis will be crucial for uncovering biological mechanisms.