DNA cytosine methylation is crucial for retrotransposon silencing and mammalian development. In a computational search for enzymes that could modify 5-methylcytosine (5mC), we identified TET proteins as mammalian homologs of the trypanosome proteins JBP1 and JBP2, which have been proposed to oxidize the 5-methyl group of thymine. We show here that TET1, a fusion partner of the MLL gene in acute myeloid leukemia, is a 2-oxoglutarate (2OG)- and Fe(II)-dependent enzyme that catalyzes conversion of 5mC to 5-hydroxymethylcytosine (hmC) in cultured cells and in vitro. hmC is present in the genome of mouse embryonic stem cells, and hmC levels decrease upon RNA interference-mediated depletion of TET1. Thus, TET proteins have potential roles in epigenetic regulation through modification of 5mC to hmC.