Brain angiogenesis inhibitor 1 (BAI1) is a putative G protein–coupled receptor with potent antiangiogenic and antitumorigenic properties that is mutated in certain cancers. BAI1 is expressed in normal human brain, but it is frequently silenced in glioblastoma multiforme. In this study, we show that this silencing event is regulated by overexpression of methyl-CpG–binding domain protein 2 (MBD2), a key mediator of epigenetic gene regulation, which binds to the hypermethylated BAI1 gene promoter. In glioma cells, treatment with the DNA demethylating agent 5-aza-2′-deoxycytidine (5-Aza-dC) was sufficient to reactivate BAI1 expression. Chromatin immunoprecipitation showed that MBD2 was enriched at the promoter of silenced BAI1 in glioma cells and that MBD2 binding was released by 5-Aza-dC treatment. RNA interference–mediated knockdown of MBD2 expression led to reactivation of BAI1 gene expression and restoration of BAI1 functional activity, as indicated by increased antiangiogenic activity in vitro and in vivo. Taken together, our results suggest that MBD2 overexpression during gliomagenesis may drive tumor growth by suppressing the antiangiogenic activity of a key tumor suppressor. These findings have therapeutic implications because inhibiting MBD2 could offer a strategy to reactivate BAI1 and suppress glioma pathobiology. Cancer Res; 71(17); 5859–70. ©2011 AACR.