How DNA methylation is interpreted and influences genome regulation remains largely unknown. Proteins of the methyl-CpG-binding domain (MBD) family are primary candidates for the readout of DNA methylation as they recruit chromatin remodelers, histone deacetylases and methylases to methylated DNA associated with gene repression. MBD protein binding requires both functional MBD domains and methyl-CpGs; however, some MBD proteins also bind unmethylated DNA and active regulatory regions via alternative regulatory domains or interaction with the nucleosome remodeling deacetylase (NuRD/Mi-2) complex members. Mutations within MBD domains occur in many diseases, including neurological disorders and cancers, leading to loss of MBD binding specificity to methylated sites and gene deregulation. Here, we summarize the current state of knowledge about MBD proteins and their role as readers of the epigenome.