Friedreich ataxia (FRDA) is typically caused by homozygosity for an expanded GAA triplet-repeat in intron 1 of the FXN gene, which results in transcriptional deficiency via epigenetic silencing. Most patients are homozygous for alleles containing > 500 triplets, but a subset (20%) have at least one expanded allele with < 500 triplets and a distinctly milder phenotype. We show that in FRDA DNA methylation spreads upstream from the expanded repeat, further than previously recognized, and establishes an FRDA-specific region of hypermethylation in intron 1 (90% in FRDA versus < 10% in non-FRDA) as a novel epigenetic signature. The hypermethylation of this differentially methylated region (FRDA-DMR) was observed in a variety of patient-derived cells; it significantly correlated with FXN transcriptional deficiency and age of onset, and it reverted to the non-disease state in isogenically corrected induced pluripotent stem cell (iPSC)-derived neurons. Bisulfite deep sequencing of the FRDA-DMR in peripheral blood mononuclear cells from 73 FRDA patients revealed considerable intra-individual epiallelic variability, including fully methylated, partially methylated, and unmethylated epialleles. Although unmethylated epialleles were rare (median = 0.33%) in typical patients homozygous for long GAA alleles with > 500 triplets, a significantly higher prevalence of unmethylated epialleles (median = 9.8%) was observed in patients with at least one allele containing < 500 triplets, less severe FXN deficiency (>20%) and later onset (>15 years). The higher prevalence in mild FRDA of somatic FXN epialleles devoid of DNA methylation is consistent with variegated epigenetic silencing mediated by expanded triplet-repeats. The proportion of unsilenced somatic FXN genes is an unrecognized phenotypic determinant in FRDA and has implications for the deployment of effective therapies.