Mammalian DNA is methylated at many CpG dinucleotides. The biological consequences of methylation are mediated by a family of methyl-CpG binding proteins (1–4). The best characterized family member is MeCP2, a transcriptional repressor that recruits histone deacetylases (5–7). Our report concerns MBD2, which can bind methylated DNA in vivo and in vitro4 and has been reported to actively demethylate DNA (ref. 8). As DNA methylation causes gene silencing, the MBD2 demethylase is a candidate transcriptional activator. Using specific antibodies, however, we find here that MBD2 in HeLa cells is associated with histone deacetylase (HDAC) in the MeCP1 repressor complex (1,9). An affinity-purified HDAC1 corepressor complex (10,11) also contains MBD2, suggesting that MeCP1 corresponds to a fraction of this complex. Exogenous MBD2 represses transcription in a transient assay, and repression can be relieved by the deacetylase inhibitor trichostatin A (TSA; ref. 12). In our hands, MBD2 does not demethylate DNA. Our data suggest that HeLa cells, which lack the known methylationdependent repressor MeCP2, use an alternative pathway involving MBD2 to silence methylated genes.