Mutations in methyl DNA binding protein 2 (MeCP2) cause the neurodevelopmental disorder Rett syndrome (RTT). The mechanism(s) by which the native MeCP2 protein operates in the cell are not well understood. Historically, MeCP2 has been characterized as a proximal gene silencer with 2 functional domains: a methyl DNA binding domain and a transcription repression domain. However, several lines of new data indicate that MeCP2 structure and function relationships are more complex. In this review, we first discuss recent studies that have advanced understanding of the basic structural biochemistry of MeCP2. This is followed by an analysis of cell-based experiments suggesting MeCP2 is a regulator, rather than a strict silencer, of transcription. The new data establish MeCP2 as a multifunctional nuclear protein, with potentially important roles in chromatin architecture, regulation of RNA splicing, and active transcription. We conclude by discussing clinical correlations between domain-specific mutations and RTT pathology to stress that all structural domains of MeCP2 are required to properly mediate cellular function of the intact protein.