MeCP2-induced heterochromatin organization is driven by oligomerization-based liquid–liquid phase separation and restricted by DNA methylation

Heterochromatin is the highly compacted form of chromatin with various condensation levels hallmarked by high DNA methylation. MeCP2 is mostly known as a DNA methylation reader but has also been reported as a heterochromatin organizer. Here, we combine liquid–liquid phase separation (LLPS) analysis and single-molecule tracking with quantification of local MeCP2 concentrations <i>in vitro</i> and <i>in vivo</i> to explore the mechanism of MeCP2-driven heterochromatin organization and dynamics. We show that MeCP2 alone forms liquid-like spherical droplets via multivalent electrostatic interactions and with isotropic mobility. Crowded environments and DNA promote MeCP2 LLPS and slow down MeCP2 mobility. DNA methylation, however, restricts the growth of heterochromatin compartments correlating with immobilization of MeCP2. Furthermore, MeCP2 self-interaction is required for LLPS and is disrupted by Rett syndrome mutations. In summary, we are able to model the heterochromatin compartmentalization as well as MeCP2 concentration and heterogeneous motion in the minimal <i>in vitro</i> system.