In vitro transcription competition with oligonucleotides has shown that a down regulating factor can be displaced by a methylated oligonucleotide covering a specific region of the avian vitellogenin II gene promoter (Proc. Natl. Acad. Sci USA, (1990) 87, 3047-3051). Gel mobility shift and competition assays show that a protein binding preferentially to methylated DNA (MDBP-2) is present in fractionated hen and rooster nuclear extracts. The protein(s) bind to the methylated sequence 5' TTCACCTTmCGCTATG-AGGGGGATCATACTGG' 3' (nucleotide positions +2 to +32) of the vitellogenin II promoter and not to other methylated DNA sequences. Contact points of the MDBP-2 with DNA were studied by DNA binding interference experiments with partially depurinated and depyrimidinated oligonucleotides. The protein has an approximate molecular weight of 40 KDa and is mainly found in the liver and oviduct. Proteolytic clipping bandshift assays of the MDBP-2 from rooster and hen liver nuclear extracts indicate that the protein from the two sources are different. In vitro transcription experiments show that the addition of a purified nuclear fraction containing the addition of a purified nuclear dependent manner the transcription of vitellogenin II gene.