Epigenetic regulation of lineage-specific genes is important for the differentiation and function of T cells. Ten-eleven translocation (Tet) proteins catalyze 5-methylcytosine (5mC) conversion to 5-hydroxymethylcytosine (5hmC) to mediate DNA demethylation. However, the roles of Tet proteins in the immune response are unknown. Here, we characterized the genome-wide distribution of 5hmC in CD4+ T cells and found that 5hmC marks putative regulatory elements in signature genes associated with effector cell differentiation. Moreover, Tet2 protein was recruited to 5hmC-containing regions, dependent on lineage-specific transcription factors. Deletion of Tet2 in T cells decreased their cytokine expression, associated with reduced p300 recruitment. In vivo, Tet2 plays a critical role in the control of cytokine gene expression in autoimmune disease. Collectively, our findings suggest that Tet2 promotes DNA demethylation and activation of cytokine gene expression in T cells.