Methylated DNA binding domain (MBD) proteins and Polycomb group (PcG) proteins maintain epigenetic silencing of transcriptional activity. We report that the DNA methylation-mediated repressor MBD1 interacts with Ring1b and hPc2, the major components of Polycomb repressive complex 1. The cysteine-rich CXXC domains of MBD1 bound to Ring1b and the chromodomain of hPc2. Chromatin immunoprecipitation analysis revealed that MBD1 and hPc2 were present in silenced Homeobox A (HOXA) genes which could be reactivated by knockdown of either MBD1 or hPc2, suggesting that MBD1 and hPc2 cooperate for transcriptional repression of HOXA genes. In the nuclei of HeLa cells, MBD1 existed in close association with these PcG proteins in some heterochromatin foci, whereas an MBD1 mutant lacking the CXXC domains or an hPc2 mutant lacking the chromodomain lost this colocalization in foci. Use of the DNA demethylating agent 5-azadeoxycytidine abolished the formation of MBD1 foci but not PcG foci. Knockdown of MBD1 by small interfering RNAs did not affect the foci containing hPc2 and Ring1b, whereas the MBD1 foci were not influenced by knockdown of hPc2. These indicate that the heterochromatin foci showing MBD1 and hPc2 colocalization arise through the interaction of MBD1 and hPc2 and that the foci of MBD1 are separable from those of the PcG proteins per se. Our present findings suggest that MBD1 and PcG proteins have overlapping roles in epigenetic gene silencing and heterochromatin foci formation through their interactions.