The packaging of DNA into nucleosomes and the organisation into higher order structures of chromatin limits the access of sequence specific DNA binding factors to DNA. In cells, DNA methylation is preferentially occuring in the linker region of nucleosomes, suggesting a structural impact of chromatin on DNA methylation. These observations raise the question whether DNA methyltransferases are capable to recognize the nucleosomal substrates and to modify the packaged DNA. Here, we performed a detailed analysis of nucleosome binding and nucleosomal DNA methylation by the maintenance DNA methyltransferase Dnmt1. Our binding studies show that Dnmt1 has a DNA length sensing activity, binding cooperatively to DNA, and requiring a minimal DNA length of 20 bp. Dnmt1 needs linker DNA to bind to nucleosomes and most efficiently recognizes nucleosomes with symmetric DNA linkers. Footprinting experiments reveal that Dnmt1 binds to both DNA linkers exiting the nucleosome core. The binding pattern correlates with the efficient methylation of DNA linkers. However, the enzyme lacks the ability to methylate nucleosomal CpG sites on mononucleosomes and nucleosomal arrays, unless chromatin remodeling enzymes create a dynamic chromatin state. In addition, our results show that Dnmt1 functionally interacts with specific chromatin remodeling enzymes to enable complete methylation of hemi-methylated DNA in chromatin.