Higher order chromatin structure and DNA methylation are implicated in multiple developmental processes, but their relationship to cell state is unknown. Here, we found that large (~10kb) DNA methylation nadirs can form long loops connecting anchor loci that may be dozens of megabases apart, as well as interchromosomal links. The interacting loci comprise ~3.5Mb of the human genome. The data are more consistent with the formation of these loops by phase separation of the interacting loci to form a genomic subcompartment, rather than with CTCF-mediated extrusion. Interestingly, unlike previously characterized genomic subcompartments, this subcompartment is only present in particular cell types, such as stem and progenitor cells. Further, we identify one particular loop anchor that is functionally associated with maintenance of the hematopoietic stem cell state. Our work reveals that H3K27me3-marked large DNA methylation nadirs represent a novel set of very long-range loops and links associated with cellular identity.