Mutations in the gene encoding methyl-CpG-binding protein 2 (MeCP2) lead to disrupted neuronal function and can cause the neurodevelopmental disorder Rett syndrome. MeCP2 is a transcriptional regulator that binds to methylated DNA and is most abundant in neuronal nuclei. The mechanisms by which MeCP2 regulates gene expression remain ambiguous, as it has been reported to function as a transcriptional silencer or activator and to execute these activities through both gene-specific and genome-wide mechanisms. We hypothesized that posttranslational modifications of MeCP2 may be important for reconciling these apparently contradictory functions. Our results demonstrate that MeCP2 contains multiple posttranslational modifications, including phosphorylation, acetylation, and ubiquitylation. Phosphorylation of MeCP2 at S229 or S80 influenced selective in vivo interactions with the chromatin factors HP1 and SMC3 and the cofactors Sin3A and YB-1. pS229 MeCP2 was specifically enriched at the RET promoter, and phosphorylation of MeCP2 was necessary for differentiation-induced activation and repression of the MeCP2 target genes RET and EGR2. These results demonstrate that phosphorylation is one of several factors that are important for interpreting the complexities of MeCP2 transcriptional modulation.