Alterations in gene expression are commonly accompanied by changes in chromatin structure. Histone lysine residues of the so called “histone tails” are subject to various post-translational modifications among which methylation has been extensively studied over the past years. The presence and the extent of methylation on histone lysine residues somehow mediate chromatin structural changes that contribute to activation or repression of gene expression. Chromatin states are functionally linked with cellular processes including the regulation of gene expression during the cell cycle. For nearly a decade, however, it proved difficult to explain mechanistically how methyl moieties on histone lysine residues impact chromatin structure. We recently found that a member of the malignant brain tumor (MBT) protein family, L3MBTL1, directly compacts chromatin in a strictly histone lysine methylation dependent fashion. Below, we briefly discuss our observations and those of others to provide an overview of how L3MBTL1, partially by chromatin condensation, regulates transcription and functions in cell cycle control.