Human p66alpha and p66beta are two potent transcriptional repressors that interact with the methyl-CpG-binding domain proteins MBD2 and MBD3. An analysis of the molecular mechanisms mediating repression resulted in the identification of two major repression domains in p66alpha and one in p66beta. Both p66alpha and p66beta are SUMO-modified in vivo: p66alpha at two sites (Lys-30 and Lys-487) and p66beta at one site (Lys-33). Expression of SUMO1 enhanced the transcriptional repression activity of Gal-p66alpha and Gal-p66beta. Mutation of the SUMO modification sites or using a SUMO1 mutant or a dominant negative Ubc9 ligase resulted in a significant decrease of the transcriptional repression of p66alpha and p66beta. The Mi-2/NuRD components MBD3, RbAp46, RbAp48, and HDAC1 were found to bind to both p66alpha and p66beta in vivo. Most of the interactions were not affected by the SUMO site mutations in p66alpha or p66beta, with two exceptions. HDAC1 binding to p66alpha was lost in the case of a p66alphaK30R mutant, and RbAp46 binding was reduced in the case of a p66betaK33R mutant. These results suggest that interactions within the Mi-2/NuRD complex as well as optimal repression are mediated by SUMOylation.