The discovery in 1999 that Rett syndrome (RTT) is caused by mutations in a gene encoding the methyl-CpG-binding repressor protein MECP2 provided a significant breakthrough in the understanding of this devastating disease. The subsequent production of Mecp2 knockout mice 2 years later provided an experimental resource to better understand how mutations in the MECP2 gene result in RTT. This paper reviews the recent progress in understanding when and where MeCP2 function becomes important in the developing brain, why MeCP2 protein levels are crucial, which genes are normally silenced by MeCP2, and how misexpression of these targets might lead to the clinical manifestations of RTT.