Cytosine DNA methylation is evolutionarily ancient, and in eukaryotes this epigenetic modification is associated with gene silencing. Proteins with SRA (SET- or RING-associated) methyl-binding domains are required for the establishment and/or maintenance of DNA methylation in both plants and mammals. The 5-methyl-cytosine (5mC)-binding specificity of several SRA domains have been characterized, and each one has a preference for DNA methylation in different sequence contexts. Here we demonstrate through mobility shift assays and calorimetric measurements that the SU(VAR)3-9 HOMOLOG 5 (SUVH5) SRA domain differs from other SRA domains in that it can bind methylated DNA in all contexts to similar extents. Crystal structures of the SUVH5 SRA domain bound to 5mC-containing DNA in either the fully or hemimethylated CG context or the methylated CHH context revealed a dual flip-out mechanism where both the 5mC and a base (5mC, C, or G, respectively) from the partner strand are simultaneously extruded from the DNA duplex and positioned within binding pockets of individual SRA domains. Our structure-based in vivo studies suggest that a functional SUVH5 SRA domain is required for both DNA methylation and accumulation of the H3K9 dimethyl modification in vivo, suggesting a role for the SRA domain in recruitment of SUVH5 to genomic loci. © 2011 by Cold Spring Harbor Laboratory Press.