Ligand screening was utilized to isolate a human cDNA that encodes a novel CpG binding protein, human CpG binding protein (hCGBP). This factor contains three cysteine-rich domains, two of which exhibit homology to the plant homeodomain finger domain. A third cysteine-rich domain conforms to the CXXC motif identified in DNA methyltransferase, human trithorax, and methyl-CpG binding domain protein 1. A fragment of hCGBP that contains the CXXC domain binds to an oligonucleotide probe containing a single CpG site, and this complex is disrupted by distinct oligonucleotide competitors that also contain a CpG motif(s). However, hCGBP fails to bind oligonucleotides in which the CpG motif is either mutated or methylated, and it does not bind to single-stranded DNA or RNA probes. Furthermore, the introduction of a CpG dinucleotide into an unrelated oligonucleotide sequence is sufficient to produce a binding site for hCGBP. Native hCGBP is detected as an 88-kDa protein by Western analysis and is ubiquitously expressed. The DNA-binding activity of native hCGBP is apparent in electrophoretic mobility shift assays, and hCGBP trans-activates promoters that contain CpG motifs but not promoters in which the CpG is ablated. These data indicate that hCGBP is a transcriptional activator that recognizes unmethylated CpG dinucleotides, suggesting a role in modulating the expression of genes located within CpG islands.