The methyl-CpG binding domain protein MBD3 has been shown to be essential for embryonic development and differentiation, and to act by suppressing gene expression through the recruitment of co-repressor complexes. We have recently shown that MBD3 is also involved in maintaining the demethylated and active state of rRNA genes, and that depletion of MBD3 results in hypermethylation of rRNA promoters. The possibility that MBD3 could also trigger DNA demethylation of RNA polymerase II-transcribed genes has not been addressed. In this study we used a gain-of-function approach to examine whether MBD3 expression alters DNA methylation states in a living cell and whether it has specific targets for DNA methylation or demethylation in the genome. We used a combination of methylated DNA immunoprecipitation (mDIP) and hybridization to a human promoter tiling microarray to examine the landscape of DNA methylation patterns in response to MBD3 overexpression. We demonstrate that MBD3 induces genomic DNA demethylation and that it has specific targets in the genome with which it associates. Demethylation is localized to promoter regions with intermediate CpG density, and promoters with predicted transcription factor binding sites for NF-Y were significantly affected. These data demonstrate a causal relationship between MBD3 and DNA demethylation of genomic targets in cells.