Dioxygenases of the Ten-Eleven Translocation (TET) family are 5-methylcytosine oxidases that convert 5-methylcytosine (5mC) to 5-hydroxymethylcytosine (5hmC) and further oxidation products in DNA. We show that Tet1 and Tet2 have distinct roles in regulating 5hmC in mouse embryonic stem cells (mESC). Tet1 depletion diminishes 5hmC levels at transcription start sites (TSS), whereas Tet2 depletion is predominantly associated with decreased 5hmC in gene bodies. Enrichment of 5hmC is observed at the boundaries of exons that are highly expressed, and Tet2 depletion results in substantial loss of 5hmC at these boundaries. In contrast, at promoter/TSS regions, Tet2 depletion results in increased 5hmC, potentially because of the redundant activity of Tet1. Together, the data point to a complex interplay between Tet1 and Tet2 in mESC, and to distinct roles for these two proteins in regulating promoter, exon, and polyadenylation site usage in cells.