MCAF1 is a recruiter that couples transcriptional factors to general transcription apparatus and thereby modulates transcription regulation and chromatin formation. Can both act as an activator or a repressor depending on the context. Mediates MBD1-dependent transcriptional repression, probably by recruiting complexes containing SETDB1. Required to stimulate histone methyltransferase activity of SETDB1 and facilitate the conversion of dimethylated to trimethylated H3 'Lys-9'. The complex formed with MBD1 and SETDB1 represses transcription and couples DNA methylation and histone 'Lys-9' trimethylation.