Abstract CD8 + T-cell exhaustion hampers disease control in cancer and chronic infections and limits efficacy of T-cell−based therapies, such as CAR T-cells. Epigenetic reprogramming of CAR T-cells by targeting TET2, a methylcytosine dioxygenase that mediates active DNA demethylation, has shown therapeutic potential; however, the role of TET2 in exhausted T-cell (T EX ) development is unclear. In CAR T-cell exhaustion models and chronic LCMV infection, TET2 drove the conversion from stem cell-like, self-renewing T EX progenitors towards terminally differentiated and effector (T EFF )-like T EX . In mouse T-cells, TET2 -deficient terminally differentiated T EX retained aspects of T EX progenitor biology, alongside decreased expression of the transcription factor TOX, suggesting that TET2 potentiates terminal exhaustion. TET2 also enforced a T EFF -like terminally differentiated CD8 + T-cell state in the early bifurcation between T EFF and T EX , indicating a broad role for TET2 in mediating the acquisition of an effector biology program that could be exploited therapeutically. Finally, we developed a clinically actionable strategy for TET2- targeted CAR T-cells, using CRISPR/Cas9 editing and site-specific adeno-associated virus transduction to simultaneously knock-in a CAR at the TRAC locus and a functional safety switch within TET2 . Disruption of TET2 with this safety switch in CAR T-cells restrained terminal T EX differentiation in vitro and enhanced anti-tumor responses in vivo . Thus, TET2 regulates pivotal fate transitions in T EX differentiation and can be targeted with a safety mechanism in CAR T-cells for improved tumor control and risk mitigation. One Sentence Summary Modulation of exhausted CD8 + T-cell differentiation by targeting TET2 improves therapeutic potential of CAR T-cells in cancer.