The genome of eukaryotes undergoes profound epigenetic modifications to allow for development and adaptation. The biological significance and mechanisms of the cytosine base modifications are incompletely understood. We and others found that 5-methylcytosine (5mC), a prominent modified base present in mammalian genomic DNA, can be oxidized stepwise and demethylated in mouse by the Ten-Eleven- Translocation (Tet) family of dioxygenases. Deficiency in Tet enzymes impedes demethylation and activation of developmental genes such as Oct4 and Lefty1 in the embryo, leading to lethality. Interestingly, oocytes lacking Tet are unable to reprogram injected somatic cell nuclei. Additionally, mouse embryonic fibroblasts (MEFs) deficient in Tet cannot be reprogrammed into iPSCs by Yamanaka factors. Tet-mediated oxidative demethylation is required for cell fate determination in embryonic development as well as for cell reprogramming.