TET2 converts 5-methylcytosine to 5-hydroxymethylcytosine (5-hmC) in DNA and is frequently mutated in myeloid malignancies, including myeloproliferative neoplasms. Here we show that the level of 5-hmC is decreased in granulocyte DNA from myeloproliferative neoplasm patients with TET2 mutations compared with granulocyte DNA from healthy patients. Inhibition of TET2 by RNA interference decreases 5-hmC levels in both human leukemia cell lines and cord blood CD34+ cells. These results confirm the enzymatic function of TET2 in human hematopoietic cells. Knockdown of TET2 in cord blood CD34+ cells skews progenitor differentiation toward the granulomonocytic lineage at the expense of lymphoid and erythroid lineages. In addition, by monitoring in vitro granulomonocytic development we found a decreased granulocytic differentiation and an increase in monocytic cells. Our results indicate that TET2 disruption affects 5-hmC levels in human myeloid cells and participates in the pathogenesis of myeloid malignancies through the disturbance of myeloid differentiation.