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The methyl–CpG dinucleotide containing a symmetrical 5-methylcytosine (mC) is involved in gene regulation and genome stability. We report here that methylation-mediated transcriptional repressor methylated DNA-binding domain 1 (MBD1) interacts with methylpurine–DNA glycosylase (MPG), which excises damaged bases from substrate DNA. MPG itself actively represses transcription and has a synergistic effect on gene silencing together with MBD1. Chromatin immunoprecipitation analysis reveals the molecular movement of MBD1 and MPG in vivo : ( i ) The MBD1–MPG complex normally exists on the methylated gene promoter; ( ii ) treatment of cells with alkylating agent methylmethanesulfonate (MMS) induces the dissociation of MBD1 from the methylated promoter, and MPG is located on both methylated and unmethylated promoters; and ( iii ) after completion of the repair, the MBD1–MPG complex is restored on the methylated promoter. Mobility-shift and structural analyses show that the MBD of MBD1 binds a methyl–CpG pair (mCpG × mCpG) but not the methyl–CpG pair containing a single 7-methylguanine (N) (mCpG × mCpN) that is known as one of the major lesions caused by MMS. We further demonstrate that knockdown of MBD1 by specific small interfering RNAs significantly increases cell sensitivity to MMS. These data suggest that MBD1 cooperates with MPG for transcriptional repression and DNA repair. We hypothesize that MBD1 functions as a reservoir for MPG and senses the base damage in chromatin.