Binds CpG islands in promoters where the DNA is methylated at position 5 of cytosine within CpG dinucleotides. Binds hemimethylated DNA as well. Recruits histone deacetylases and DNA methyltransferases. Acts as transcriptional repressor and plays a role in gene silencing. Functions as a scaffold protein, targeting GATAD2A and GATAD2B to chromatin to promote repression (By similarity). May enhance the activation of some unmethylated cAMP-responsive promoters (By similarity). Selectively represses transcription activity of methylated rRNA promoters. Heterodimer with MBD3. Component of the MeCP1 complex that contains HDAC1 and HDAC2. Binds DNMT1, MIZF, GPN1, SIN3A, GATAD2A/p66-alpha and GATAD2B/p66-beta (By similarity). Interacts with DHX9 (By similarity). Interacts with SPHK2 (By similarity). Nuclear, in discrete foci. Detected at replication foci in late S phase. Highly expressed in brain, heart, kidney, lung, skeletal muscle, spleen and testis. Detected at lower levels in embryonic stem cells.