Methyl-CpG binding domain protein 1 regulates localization and activity of Tet1 in a CXXC3 domain-dependent manner

Cytosine modifications diversify and structure the genome thereby controlling proper development and differentiation. Here, we focus on the interplay of the 5-methylcytosine reader Mbd1 and modifier Tet1 by analyzing their dynamic subcellular localization and the formation of the Tet oxidation product 5-hydroxymethylcytosine in mammalian cells. Our results demonstrate that Mbd1 enhances Tet1-mediated 5-methylcytosine oxidation. We show that this is due to enhancing the localization of Tet1, but not of Tet2 and Tet3 at heterochromatic DNA. We find that the recruitment of Tet1 and concomitantly its catalytic activity eventually leads to the displacement of Mbd1 from methylated DNA. Finally, we demonstrate that increased Tet1 heterochromatin localization and 5-methylcytosine oxidation are dependent on the CXXC3 domain of Mbd1, which recognizes unmethylated CpG dinucleotides. The Mbd1 CXXC3 domain deletion isoform, which retains only binding to methylated CpGs, on the other hand, blocks Tet1-mediated 5-methylcytosine to 5-hydroxymethylcytosine conversion, indicating opposite biological effects of Mbd1 isoforms. Our study provides new insights on how cytosine modifications, their modifiers and readers cross-regulate themselves.