MeCP2 is a chromosomal protein that is concentrated in the centromeric heterochromatin of mouse cells. In vitro, the protein binds preferentially to DNA containing a single symmetrically methylated CpG. To find out whether the heterochromatic localization of MeCP2 depended on DNA methylation, we transiently expressed MeCP2-LacZ fusion proteins in cultured cells. Intact protein was targeted to heterochromatin in wild-type cells but was inefficiently localized in mutant cells with low levels of genomic DNA methylation. Deletions within MeCP2 showed that localization to heterochromatin required the 85-amino-acid methyl-CpG binding domain but not the remainder of the protein. Thus MeCP2 is a methyl-CpG-binding protein in vivo and is likely to be a major mediator of downstream consequences of DNA methylation.Widespread methylation of genomic DNA is a characteristic of the vertebrates. The target of methylation is the dinucleotide CpG, which acquires a methyl group at the 5 position on the cytosine ring. Functions of methylation have long been the subject of experiment and speculation, but recent experiments provide evidence for an essential role in development. Li et al. (16) disrupted the gene that encodes the DNA methyltransferase (MTase) enzyme in mice and found that homozygous mutant embryos had greatly reduced levels of methylation, were developmentally retarded, and died at midgestation. Undifferentiated embryonic stem (ES) cells, on the other hand, behaved normally in culture, despite very low levels of methylation, indicating that methylation may be less important at this totipotent stage. Why methylation is essential for development is not yet completely clear. One possibility is that methylation-mediated repression of genes is somehow built into the developmental program (discussed in reference 1).To understand the biology of DNA methylation, it is necessary to identify all components of the system. Several proteins that bind specifically to methylated DNA are known (reviewed in reference 31). Two of these, MeCP1 and MeCP2, bind to symmetrical methyl-CpG pairs in any sequence context and may therefore be of general significance (14,17,18). Studies of MeCP1 have implicated it in methylation-mediated gene inactivation (2, 3). The second protein, MeCP2, consists of a single chain of 492 amino acids in the rat, including an 85-amino-acid domain near the N terminus that encodes all of the specificity required for binding to methylated DNA (22). The mouse protein (484 amino acids) is very similar to its rat homolog, showing an overall identity of 95% at the amino acid level and absolute conservation of the methylated DNA binding domain (29). This methyl-CpG binding domain (MBD) can bind as a monomer to a single symmetrically methylated CpG pair. Immunofluorescence analysis of mouse chromosomes shows that MeCP2 is preferentially localized in pericentromeric heterochromatin (14), which is also the region of highest 5-methylcytosine concentration (19). The predominant DNA sequence in mouse heterochromatin is the m...