Mutations in the poorly characterized oncoprotein MORC2, a Gyrase, Hsp90, Histidine Kinase, MutL (GHKL)-type ATPase, result in defects in epigenetic regulation and DNA damage response. Phosphorylated MORC2 is associated with gastric cancer and induces cancer progression in various in vitro cancer models. However, the basis for its phosphorylation-dependent chromatin remodeling activity remains unclear. Here, we elucidate the DNA binding mechanism of human MORC2 using cryo-electron microscopy, hydrogen-deuterium exchange mass spectrometry and crosslinking mass spectrometry. The MORC2 ATPase forms a symmetric dimer with local rearrangements in its C-terminal region upon DNA binding. Genomics and live cell fluorescence lifetime imaging microscopy coupled with FRET studies show that MORC2 preferentially binds to open chromatin regions depleted of nucleosomes. Further, in vitro single molecule fluorescence imaging illustrates a DNA compaction function by MORC2 in an ATP hydrolysis and phosphorylation-specific manner. This comprehensive characterization of MORC2 provides a foundation for a detailed understanding of MORC family chromatin remodeling activity as part of the epigenetic regulation process. Our findings also reveal how phosphorylation in general can modulate DNA compaction with a new function.