Rett syndrome (RTT) is a severe neurological disorder caused by mutations in the gene encoding methyl-CpG-binding protein 2 (MeCP2). Almost two decades of research into RTT have greatly advanced our understanding of the function and regulation of the multifunctional protein MeCP2. Here, we review recent advances in understanding how loss of MeCP2 impacts different stages of brain development, discuss recent findings demonstrating the molecular role of MeCP2 as a transcriptional repressor, assess primary and secondary effects of MeCP2 loss and examine how loss of MeCP2 can result in an imbalance of neuronal excitation and inhibition at the circuit level along with dysregulation of activity-dependent mechanisms. These factors present challenges to the search for mechanism-based therapeutics for RTT and suggest specific approaches that may be more effective than others.