Transcriptional repressor that binds CpG islands in promoters where the DNA is methylated at position 5 of cytosine within CpG dinucleotides. Binding is abolished by the presence of 7-mG that is produced by DNA damage by methylmethanesulfonate (MMS). Acts as transcriptional repressor and plays a role in gene silencing by recruiting AFT7IP; which in turn recruits factors such as the histone methyltransferase SETDB1. Probably forms a complex with SETDB1 and ATF7IP that represses transcription and couples DNA methylation and histone 'Lys-9' trimethylation. Isoform 1 and isoform 2 can also repress transcription from unmethylated promoters. {ECO:0000269|PubMed:10454587; ECO:0000269|PubMed:10648624; ECO:0000269|PubMed:12665582; ECO:0000269|PubMed:12697822; ECO:0000269|PubMed:12711603; ECO:0000269|PubMed:14555760; ECO:0000269|PubMed:14610093; ECO:0000269|PubMed:15327775; ECO:0000269|PubMed:9207790; ECO:0000269|PubMed:9774669}.