Of the recently discovered group of proteins that interpret DNA methylation signals by preferentially associating with methylated CpG dinucleotides, the methyl-CpG-binding protein 2 (MeCP2) has attracted considerable attention in view of its ability to repress transcription. The interest in MeCP2 dramatically increased following the discovery of mutated forms of the protein in patients with Rett syndrome, a neurodevelopmental disease. A connection with carcinogenesis has also been established. This review attempts to bring together and critically discuss recently acquired information about the molecular biology of the protein and its mechanism of action. A careful overview of the literature reveals the complexity of its activity, which goes well beyond the recognized chromatin connections. Finally, the newly established facts concerning the connection of MeCP2 to human disease are presented.