The hyperplasia-carcinoma sequence is a stepwise tumourigenic programme towards endometrial cancer in which normal endometrial epithelium becomes neoplastic through non-atypical endometrial hyperplasia (NAEH) and atypical endometrial hyperplasia (AEH), under the influence of unopposed oestrogen. NAEH and AEH are known to exhibit polyclonal and monoclonal cell growth, respectively; yet, aside from focal PTEN protein loss, the genetic and epigenetic alterations that occur during the cellular transition remain largely unknown. We sought to explore the potential molecular mechanisms that promote the NAEH-AEH transition and identify molecular markers that could help to differentiate between these two states. We conducted target-panel sequencing on the coding exons of 596 genes, including 96 endometrial cancer driver genes, and DNA methylome microarrays for 48 NAEH and 44 AEH lesions that were separately collected via macro- or micro-dissection from the endometrial tissues of 30 cases. Sequencing analyses revealed acquisition of the PTEN mutation and the clonal expansion of tumour cells in AEH samples. Further, across the transition, alterations to the DNA methylome were characterised by hypermethylation of promoter/enhancer regions and CpG islands, as well as hypo- and hyper-methylation of DNA-binding regions for transcription factors relevant to endometrial cell differentiation and/or tumourigenesis, including FOXA2, SOX17, and HAND2. The identified DNA methylation signature distinguishing NAEH and AEH lesions was reproducible in a validation cohort with modest discriminative capability. These findings not only support the concept that the transition from NAEH to AEH is an essential step within neoplastic cell transformation of endometrial epithelium but also provide deep insight into the molecular mechanism of the tumourigenic programme. © 2024 The Authors. The Journal of Pathology published by John Wiley & Sons Ltd on behalf of The Pathological Society of Great Britain and Ireland.