In recent years, epigenetic alterations have come to prominence in cancer research. In particular, hypermethylation of CpG islands located in the promoter regions of tumor-suppressor genes is now firmly established as an important mechanism for gene inactivation in cancer. One of the most remarkable achievements in the field has been the identification of the methyl-CpG-binding domain family of proteins, which provide mechanistic links between specific patterns of DNA methylation and histone modifications. Although many of the current data indicate that methyl-CpG-binding proteins play a key role in maintaining a transcriptionally inactive state of methylated genes, MBD4 is also known to be involved in excision repair of T:G mismatches. The latter is a member of this family of proteins and appears to play a role in reducing mutations at 5-methylcytosine. This review examines the contribution of methyl-CpG-binding proteins in the epigenetic pathway of cancer.