DNA methylation and histone H3 lysine 9 methylation (H3K9me) are hallmarks of heterochromatin in plants and mammals and are successfully maintained across generations. The biochemical and structural basis for this maintenance is poorly understood. The maintenance DNA methyltransferase from Zea mays, ZMET2, recognizes H3K9me2 via a chromodomain (CD) and bromo-adjacent homology domain (BAH), which flank the catalytic domain. Here, we show that the H3K9me mark allosterically stimulates ZMET2 activity and also substantially increases the specificity of ZMET2 for hemimethylated versus unmethylated DNA. Interestingly, dinucleosomes are the preferred ZMET2 substrate, with DNA methylation targeted primarily to linker DNA. Further, while the CD stabilizes ZMET2 binding, the BAH domain is critical for catalysis and serves as an allosteric regulator of the enzyme. Negative stain electron microscopy shows a single ZMET2 molecule bridging two nucleosomes within a dinucleosome, consistent with the biochemical analyses. We propose a model in which CD-mediated binding and allosteric activation via BAH/H3K9me interactions coupled with nucleosome bridging allows ZMET2 to correctly read the chromatin context and thereby faithfully maintain DNA methylation and reinforce heterochromatic elements across the genome.