The human genome contains a number of methyl CpG binding proteins that translate DNA methylation into a physiological response. To gain insight into the function of MBD2 and MBD3, we first applied protein tagging and mass spectrometry. We show that MBD2 and MBD3 assemble into mutually exclusive distinct Mi-2/NuRD-like complexes, called MBD2/NuRD and MBD3/NuRD. We identified DOC-1, a putative tumor suppressor, as a novel core subunit of MBD2/NuRD as well as MBD3/NuRD. PRMT5 and its cofactor MEP50 were identified as specific MBD2/NuRD interactors. PRMT5 stably and specifically associates with and methylates the RG-rich N terminus of MBD2. Chromatin immunoprecipitation experiments revealed that PRMT5 and MBD2 are recruited to CpG islands in a methylation-dependent manner in vivo and that H4R3, a substrate of PRMT, is methylated at these loci. Our data show that MBD2/NuRD and MBD3/NuRD are distinct protein complexes with different biochemical and functional properties.