Epigenetic regulation in eukaryotes is executed by a complex set of signaling interactions among small RNA species and chromatin marks, including histone modification and DNA methylation. We identified vim1 (VARIANT IN METHYLATION 1), an Arabidopsis mutation causing cytosine hypomethylation and decondensation of centromeres in interphase. VIM1 is a member of a small gene family, encoding proteins containing PHD, RING, and SRA (SET- and RING-associated) domains, which are found together in mammalian proteins implicated in regulation of chromatin modification, transcription, and the cell cycle. VIM1 is an unconventional methylcytosine-binding protein that interacts in vitro with 5mCpG- and 5mCpHpG-modified DNA (via its SRA domain), as well as recombinant histones (H2B, H3, H4, and HTR12) in plant extracts. VIM1 associates with methylated genomic loci in vivo and is enriched in chromocenters. Our findings suggest that VIM1 acts at the DNA methylation–histone interface to maintain centromeric heterochromatin.