In order to explore the defense mechanism by which retrotransposons are repressed, we assessed the ability of methyl-CpG-binding protein 2, MeCP2, to influence LINE-1 (L1) and Alu transcription and, furthermore, L1 retrotransposition. In transient transfection assays, targeting of the transcriptional-repression domain (TRD) of MeCP2 (via a linked Gal4 DNA-binding domain) to the transcriptional start site of L1 promoter-driven reporter constructs efficiently repressed transcription. The Gal4-linked TRD of the related methyl-CpG-binding protein MBD1 also repressed transcription but not that of MBD2. Furthermore, full-length MeCP2 effectively repressed transcription of a HpaII-methylated L1 reporter. Secondly, we used a genetic assay employing a full-length neo-marked L1 reporter construct to study L1 retrotransposition. We found the Gal4-linked TRD of MeCP2 to repress effectively L1 retrotransposition when targeted to the retrotransposition reporter. Retrotransposition was also reduced in response to in vitro HpaII methylation of the reporter and was further decreased by co-expressed full-length MeCP2. In striking contrast expression of the Gal4-linked TRD of MeCP2 had no inhibiting effect on transcription of an AluSx reporter tagged with a 7S-upstream sequence. Furthermore, full-length MeCP2 abrogated the methylation-induced repression of this reporter. Our results indicate that MeCP2 serves a role in repression of L1 expression and retrotransposition but has no inhibiting effect on Alu transcription.