Retinoic acid (RA) plays important roles in development, growth, and homeostasis through regulation of the nuclear receptors for RA (RARs). Herein, we identify Hypermethylated in Cancer 1 (Hic1) as an RA-inducible gene. HIC1 encodes a tumor suppressor, which is often silenced by promoter hypermethylation in cancer. Treatment of cells with an RAR agonist causes a rapid recruitment of an RAR/RXR complex consisting of TDG, the lysine acetyltransferase CBP, and TET 1/2 to the Hic1 promoter. Complex binding coincides with a transient accumulation of 5fC/5caC and concomitant upregulation of Hic1 expression, both of which are TDG dependent. Furthermore, conditional deletion of Tdg in vivo is associated with Hic1 silencing and DNA hypermethylation of the Hic1 promoter. These findings suggest that the catalytic and scaffolding activities of TDG are essential for RA-dependent gene expression and provide important insights into the mechanisms underlying targeting of TET-TDG complexes. Display omitted •The gene Hypermethylated in Cancer 1 (Hic1) is a direct retinoic acid receptor (RAR) target•RA-dependent induction of HIC1 requires a TDG-containing demethylation complex•Deletion of TDG in vivo leads to DNA hypermethylation and loss of HIC1 expression•RAR signaling has a fundamental role in initiating DNA demethylation at select loci Hassan et al. report that DNA methylation and expression of Hypermethylated in Cancer 1 (Hic1) are regulated by the retinoic acid receptor (RAR) in a TDG dependent manner. Failure to recruit TDG and TETs may contribute to aberrant silencing of HIC1 in cancer.