The modified DNA base 5-hydroxymethylcytosine (5hmC), sometimes called the sixth base, is present in the mammalian genome where it is generated by oxidation of 5-methylcytosine (5mC; the fifth base) by enzymes of the Tet family. Four papers in this issue, from the Helin, Zhang, Rao and Reik laboratories, respectively, report on the genome-wide distribution of Tet1 and/or 5hmC in mouse embryonic stem cells using the ChIP-seq technique. Links between Tet1 and transcription regulation — both activation and repression — are revealed. Anjana Rao and colleagues also describe two alternative methods with increased sensitivity for mapping single 5hmC bases. In the associated News & Views, Nathalie Véron and Antoine H. F. M. Peters discuss what these and other recent papers reveal about the role of Tet proteins in regulating DNA methylation and gene expression. Epigenetic modification of the mammalian genome by DNA methylation (5-methylcytosine) has a profound impact on chromatin structure, gene expression and maintenance of cellular identity1. The recent demonstration that members of the Ten-eleven translocation (Tet) family of proteins can convert 5-methylcytosine to 5-hydroxymethylcytosine raised the possibility that Tet proteins are capable of establishing a distinct epigenetic state2,3. We have recently demonstrated that Tet1 is specifically expressed in murine embryonic stem (ES) cells and is required for ES cell maintenance2. Using chromatin immunoprecipitation coupled with high-throughput DNA sequencing, here we show in mouse ES cells that Tet1 is preferentially bound to CpG-rich sequences at promoters of both transcriptionally active and Polycomb-repressed genes. Despite an increase in levels of DNA methylation at many Tet1-binding sites, Tet1 depletion does not lead to downregulation of all the Tet1 targets. Interestingly, although Tet1-mediated promoter hypomethylation is required for maintaining the expression of a group of transcriptionally active genes, it is also involved in repression of Polycomb-targeted developmental regulators. Tet1 contributes to silencing of this group of genes by facilitating recruitment of PRC2 to CpG-rich gene promoters. Thus, our study not only establishes a role for Tet1 in modulating DNA methylation levels at CpG-rich promoters, but also reveals a dual function of Tet1 in promoting transcription of pluripotency factors as well as participating in the repression of Polycomb-targeted developmental regulators.