DNA methylation is associated with gene silencing in eukaryotic organisms. Although pathways controlling the establishment, maintenance and removal of DNA methylation are known, relatively little is understood about how DNA methylation influences gene expression. Here we identified a METHYL-CpG-BINDING DOMAIN 7 (MBD7) complex in Arabidopsis thaliana that suppresses the transcriptional silencing of two LUCIFERASE (LUC) reporters via a mechanism that is largely downstream of DNA methylation. Although mutations in components of the MBD7 complex resulted in modest increases in DNA methylation concomitant with decreased LUC expression, we found that these hyper-methylation and gene expression phenotypes can be genetically uncoupled. This finding, along with genome-wide profiling experiments showing minimal changes in DNA methylation upon disruption of the MBD7 complex, places the MBD7 complex amongst a small number of factors acting downstream of DNA methylation. This complex, however, is unique as it functions to suppress, rather than enforce, DNA methylation-mediated gene silencing.