Cancer is characterised by DNA hypermethylation and gene silencing of CpG island-associated promoters, including tumour-suppressor genes. The methyl-CpG-binding domain (MBD) family of proteins bind to methylated DNA and can aid in the mediation of gene silencing through interaction with histone deacetylases and histone methyltransferases. However, the mechanisms responsible for eliciting CpG island hypermethylation in cancer, and the potential role that MBD proteins play in modulation of the methylome remain unclear. Our previous work demonstrated that MBD2 preferentially binds to the hypermethylated GSTP1 promoter CpG island in prostate cancer cells. Here, we use functional genetic approaches to investigate if MBD2 plays an active role in reshaping the DNA methylation landscape at this locus and genome-wide. First, we show that loss of MBD2 results in inhibition of both maintenance and spread of de novo methylation of a transfected construct containing the GSTP1 promoter CpG island in prostate cancer cells and Mbd2-/- mouse fibroblasts. De novo methylation was rescued by transient expression of Mbd2 in Mbd2-/- cells. Second, we show that MBD2 depletion triggers significant hypomethylation genome-wide in prostate cancer cells with concomitant loss of MBD2 binding at promoter and enhancer regulatory regions. Finally, CpG islands and shores that become hypomethylated after MBD2 depletion in LNCaP cancer cells show significant hypermethylation in clinical prostate cancer samples, highlighting a potential active role of MBD2 in promoting cancer-specific hypermethylation. Importantly, co-immunoprecipiation of MBD2 shows that MBD2 associates with DNA methyltransferase enzymes 1 and 3A. Together our results demonstrate that MBD2 has a critical role in 'rewriting' the cancer methylome at specific regulatory regions.