BANP opens chromatin and activates CpG-island-regulated genes

The majority of gene transcripts generated by RNA polymerase II in mammalian genomes initiate at CpG island (CGI) promoters1,2, yet our understanding of their regulation remains limited. This is in part due to the incomplete information that we have on transcription factors, their DNA-binding motifs and which genomic binding sites are functional in any given cell type3–5. In addition, there are orphan motifs without known binders, such as the CGCG element, which is associated with highly expressed genes across human tissues and enriched near the transcription start site of a subset of CGI promoters6–8. Here we combine single-molecule footprinting with interaction proteomics to identify BTG3-associated nuclear protein (BANP) as the transcription factor that binds this element in the mouse and human genome. We show that BANP is a strong CGI activator that controls essential metabolic genes in pluripotent stem and terminally differentiated neuronal cells. BANP binding is repelled by DNA methylation of its motif in vitro and in vivo, which epigenetically restricts most binding to CGIs and accounts for differential binding at aberrantly methylated CGI promoters in cancer cells. Upon binding to an unmethylated motif, BANP opens chromatin and phases nucleosomes. These findings establish BANP as a critical activator of a set of essential genes and suggest a model in which the activity of CGI promoters relies on methylation-sensitive transcription factors that are capable of chromatin opening.