Diabetes elevates matrix metalloproteinase-9 (MMP-9) in the retina and its capillary cells, and activated MMP-9 damages mitochondria, accelerating retinal capillary cell apoptosis, a phenomenon which precedes the development of retinopathy. Diabetes also favors epigenetic modifications regulating the expression of many genes. DNA methylation is maintained by methylating–hydroxymethylating enzymes, and retinal DNA methyltransferase (Dnmt) is activated in diabetes. Our aim is to investigate the role of DNA methylation in MMP-9 regulation. The effect of high glucose on 5-methylcytosine (5mC) and 5-hydroxymethyl cytosine (5hmC), and binding of Dnmt1 and hydroxymethylating enzyme (Tet2) on MMP-9 promoter were quantified in retinal endothelial cells. Specific role of Tet2 in MMP-9 activation was validated using Tet2-siRNA. The results were confirmed in the retina from streptozotocin-induced diabetic mouse. Although glucose increased Dnmt1 binding at MMP-9 promoter, it decreased 5mC levels. At the same promoter site, Tet2 binding and 5hmC levels were elevated. Tet2-siRNA ameliorated increase in 5hmC and MMP-9 transcription, and protected mitochondrial damage. Diabetic mice also presented similar dynamic DNA methylation changes in the retinal MMP-9 promoter. Thus, in diabetes transcription of retinal MMP-9 is maintained, in part, by an active DNA methylation–hydroxymethylation process, and regulation of this machinery should help maintain mitochondrial homeostasis and inhibit the development/progression of diabetic retinopathy.