Mutations within the Arabidopsis METHYL-CpG BINDING DOMAIN 9 gene (AtMBD9) cause pleotropic phenotypes including early flowering and multiple lateral branches. Early flowering was previously attributed to the repression of flowering locus C (FLC) due to a reduction in histone acetylation. However, the reasons for other phenotypic variations remained obscure. Recent studies suggest an important functional correlation between DNA methylation and histone modifications. By investigating this relationship, we found that the global genomic DNA of atmbd9 was over-methylated, including the FLC gene region. Recombinant AtMBD9 does not have detectable DNA demethylation activity in vitro, but instead has histone acetylation activity. Ectopic over-expression of AtMBD9 and transient DNA demethylation promotes flowering and causes partial recovery of the normal branching phenotype. Co-immunoprecipitation assays suggest that AtMBD9 interacts in vivo with some regions of the FLC gene and binds to histone 4 (H4). Gene expression profile analysis revealed earlier up-regulation of some flower-specific transcriptional factors and alteration of potential hormonal and signal transducer axillary branching regulatory genes. In accordance with this result, AtMBD9 itself was found to be localized in the nucleus and expressed in the flower and axillary buds. Together, these results suggest that AtMBD9 controls flowering time and axillary branching by modulating gene expression through DNA methylation and histone acetylation, and reveal another component of the epigenetic mechanism controlling gene expression.