Chemically modified nucleic acid bases are sources of genomic instability and mutations but may also regulate gene expression as epigenetic or epitranscriptomic modifications. Depending on the cellular context, they can have vastly diverse impacts on cells, from mutagenesis or cytotoxicity to changing cell fate by regulating chromatin organisation and gene expression. Identical chemical modifications exerting different functions pose a challenge for the cell’s DNA repair machinery, as it needs to accurately distinguish between epigenetic marks and DNA damage to ensure proper repair and maintenance of (epi)genomic integrity. The specificity and selectivity of the recognition of these modified bases relies on DNA glycosylases, which acts as DNA damage, or more correctly, as modified bases sensors for the base excision repair (BER) pathway. Here, we will illustrate this duality by summarizing the role of uracil-DNA glycosylases, with particular attention to SMUG1, in the regulation of the epigenetic landscape as active regulators of gene expression and chromatin remodelling. We will also describe how epigenetic marks, with a special focus on 5-hydroxymethyluracil, can affect the damage susceptibility of nucleic acids and conversely how DNA damage can induce changes in the epigenetic landscape by altering the pattern of DNA methylation and chromatin structure.