The recently identified transcription factor YY2 shares important features with the well characterized YY1 zinc finger protein. Both proteins mediate activating as well as repressing transcriptional properties and bind specifically to an identical DNA consensus motif, suggesting synergistic or competitive function of both factors in controlling target genes. In fact, the human yy2 gene has evolved from a retroposed copy of yy1, unusually inserted within an intron of another gene, the membrane-bound transcription factor protease site 2 (mbtps2). To elucidate the biological function of human yy2, we studied its regulation within the extraordinary genomic context. The intronic upstream region of yy2 indeed mediates significant promoter activity. In vitro, transcriptional activity of the CpG-rich yy2 promoter is clearly repressed by DNA methylation. In vivo, DNA demethylation experiments performed by treating human embryonic kidney (HEK293) cells with 5-Aza-2-deoxycytidine (Aza) revealed that endogenous yy2 expression is more than 3-fold enhanced whereas the mbtps2 level appears unaffected. In summary, our findings indicate that yy2 expression is mediated by its own methylation-sensitive promoter.