One of the main regulators of gene expression during embryogenesis and stem cell differentiation is DNA methylation. The recent identification of hydroxymethylcytosine (5hmC) as a novel epigenetic mark sparked an intense effort to characterize its specialized enzymatic machinery and to understand the biological significance of 5hmC. The recent discovery of recurrent deletions and somatic mutations in the TET gene family, which includes proteins that can hydroxylate methylcytosine (5mC), in a large fraction of myeloid malignancies further suggested a key role for dynamic DNA methylation changes in the regulation of stem cell differentiation and transformation.