The genes of the vertebrate beta-globin locus undergo a switch in expression during development whereby embryonic/fetal genes of the cluster are sequentially silenced and the adult genes are activated during erythroid development. DNA methylation has been shown to be associated with developmentally silenced globin genes, and compounds that inhibit cytosine methylation have been shown to activate transcription from developmentally silenced globin genes in several species, including humans. Previously, we have shown that the methyl domain binding protein 2 (MBD2) is involved in maintaining embryonic rho-globin gene silencing in adult avian erythroid cells. We describe here a role for MBD2 in the DNA methylation mediated silencing and maintenance of silencing of the human fetal gamma-globin gene in a transgenic mouse model. We confirmed the previously published report by Pace et al that the gamma-globin gene is reactivated, upon treatment with the DNA methyltransferase inhibitor, 5-azacytidine, of mice containing the entire beta-globin locus as a yeast artificial chromosome (BetaYAC) transgene. In order to elucidate the mechanism through which DNA methylation represses the gamma-globin gene in adult erythroid cells, betaYAC/MBD2−/− mice were generated by breeding BetaYAC mice with MBD2−/− mice. Anemic adult betaYAC/MBD2−/− mice continue to express the gamma-globin gene at a level commensurate with animals treated with 5-azacytidine, which is10–20 fold over those treated with 1-acetyl-2-phenylhydrazine alone, as measured by both quantitative PCR and by RNase protection assays. In addition, the level of gamma-globin gene expression is consistently several fold higher in MBD2−/− compared to wild type BetaYAC mice in 14.5 and 16.5 dpc fetal liver erythroblasts. Furthermore, transcriptional activation of the gamma-globin gene in adult erythroblasts is associated with a modest decrease in DNA methylation around the gamma-globin promoters and a ~4-fold enrichment of histone H3 trimethylated at lysine 4 (TriK4), as measured by chromatin immunoprecipitation assay using quantitative PCR. Finally, treatment of MBD2 null mice with 5-azacytidine induces only a small, non-additive induction of gamma-globin expression indicating that DNA methylation acts primarily through MBD2 to maintain gamma-globin suppression in adult erythroid cells. These results suggest that MBD2 is a potential target for therapeutic induction of gamma-globin gene expression in the settings of sickle cell anemia and beta-thalassemia.