The epigenetic control of transcription requires the selective recognition of methylated CpG dinucleotides by methylation-sensitive sequence-specific DNA binding proteins. In order to probe the mechanism of selective interaction of the methyl-binding protein with methylated DNA, we have prepared a series of oligonucleotides containing modified purines and pyrimidines at the recognition site, and we have examined the binding of these oligonucleotides to the methyl-binding domain (MBD) of the methyl-CpG-binding protein 2 (MeCP2). Our results suggest that pyrimidine 5-substituents similar in size to a methyl group facilitate protein binding; however, binding affinity does not correlate with the hydrophobicity of the substituent, and neither the 4-amino group of 5-methylcytosine (mC) nor Watson-Crick base pair geometry is essential for MBD binding. However, 5-substituted uracil analogues in one strand do not direct human DNA methyltransferase 1 (DNMT1) methylation of the opposing strand, as does mC. Important recognition elements do include the guanine O6 and N7 atoms present in the major groove. Unexpectedly, removal of the guanine 2-amino group from the minor groove substantially enhances MBD binding, likely resulting from DNA bending at the substitution site. The enhanced binding of the MBD to oligonucleotides containing several cytosine analogues observed here is better explained by a DNA-protein interface mediated by structured water as opposed to hydrophobic interactions.