The heterogeneous collection of nucleosome remodelling and deacetylation (NuRD) complexes can be grouped into the MBD2- or MBD3-containing complexes MBD2-NuRD and MBD3-NuRD. MBD2 is known to bind to methylated CpG sequences in vitro in contrast to MBD3. Although functional differences have been described, a direct comparison of MBD2 and MBD3 in respect to genome-wide binding and function has been lacking. Here, we show that MBD2-NuRD, in contrast to MBD3-NuRD, converts open chromatin with euchromatic histone modifications into tightly compacted chromatin with repressive histone marks. Genome-wide, a strong enrichment for MBD2 at methylated CpG sequences is found, whereas CpGs bound by MBD3 are devoid of methylation. MBD2-bound genes are generally lower expressed as compared with MBD3-bound genes. When depleting cells for MBD2, the MBD2-bound genes increase their activity, whereas MBD2 plus MBD3-bound genes reduce their activity. Most strikingly, MBD3 is enriched at active promoters, whereas MBD2 is bound at methylated promoters and enriched at exon sequences of active genes.