Mutations in the gene encoding the methyl-CG binding protein MeCP2 cause several neurological disorders including Rett syndrome. The di-nucleotide methyl-CG (mCG) is the classical MeCP2 DNA recognition sequence, but additional methylated sequence targets have been reported. Here we show by in vitro and in vivo analyses that MeCP2 binding to non-CG methylated sites in brain is largely confined to the tri-nucleotide sequence mCAC. MeCP2 binding to chromosomal DNA in mouse brain is proportional to mCAC + mCG density and unexpectedly defines large genomic domains within which transcription is sensitive to MeCP2 occupancy. Our results suggest that MeCP2 integrates patterns of mCAC and mCG in the brain to restrain transcription of genes critical for neuronal function.