Mi-2/nucleosome remodeling and deacetylase (NuRD) chromatin remodeling complexes are important regulators of chromatin structure and DNA accessibility. We examined requirements for individual domains of chromodomain helicase DNA-binding protein 4 (CHD4), a core catalytic component of NuRD complexes, as well as the NuRD subunit methyl-binding domain protein 2 (MBD2) and methylated DNA, for NuRD function in the context of tissue-specific transcription. By itself, loss of NuRD activity is not sufficient for transcriptional activation. However, NuRD complexes greatly reduce activation of the B cell-specific mb-1 (Cd79a) gene by the transcription factors EBF1 and Pax5. Using our B cell model system, we determined that the two chromodomains and ATPase/helicase and C-terminal domains (CTD) of CHD4 are all necessary for repression of mb-1 promoters by NuRD. All of these domains except the CTD are required for efficient association of CHD4 with mb-1 promoter chromatin. Loss of MBD2 expression or of DNA methylation impaired association of CHD4 with mb-1 promoter chromatin and enhanced its transcription. We conclude that repressive functions of MBD2-containing NuRD complexes are dependent on cooperative interactions between the major domains of CHD4 with histones and DNA and on binding of methylated DNA by MBD2.