ethyl-CpG-binding protein 2 (MeCP2) is an epigenetic reader essential for neuronal function, but how it binds DNA methylation within chromatin is still unclear. Using designer nucleosomes we observe that MeCP2 preferentially binds DNA methylation positioned at multiple sites around the nucleosome. Surprisingly, MeCP2 can even bind methylated DNA in bent core nucleosomal DNA. However, this activity requires additional DNA linker interactions, using regions outside of the canonical methyl binding domain. We mapped a novel DNA-binding region in MeCP2 required for this function. Furthermore, we find Histone H1 antagonises the MeCP2-nucleosome interaction through linker binding competition. Overall this reveals that MeCP2 combines nonspecific, but essential, interactions with linker DNA to aid specific binding to nucleosomal methylated DNA, independent of nucleosome structure. Our findings reveal in molecular detail how this clinically important protein interacts with chromatin and they identify novel domain that contributes to full MeCP2 function.