TET2 is mutated/deleted with high frequencies in multiple forms of myeloid malignancies including MDS, CMML, MPN, and AML. However, little is known regarding the biological function of TET2 and its role in the pathogenesis of myeloid malignancies. To study the function of TET2 in vivo, we generated a Tet2 knock out mouse model. Deletion of Tet2 in mice led to dramatic reduction in the 5-hydroxymethylcytosine levels and concomitant increase in the 5-methylcytosine levels in the genomic DNA of BM cells. The Tet2(-/-) mice contained an increased Lin(-)Sca-1(+)c-Kit(+) (LSK) cell pool before the development of myeloid malignancies. A competitive reconstitution assay revealed that Tet2(-/-) LSK cells had an increased hematopoietic repopulating capacity with an altered cell differentiation skewing toward monocytic/granulocytic lineages. Approximately 1/3 of Tet2(-/-) and 8% of Tet2(+/-) mice died within 1 year of age because of the development of myeloid malignancies resembling characteristics of CMML, MPD-like myeloid leukemia, and MDS. Furthermore, transplantation of Tet2(-/-), but not wild-type (WT) or Tet2(+/-) BM cells, led to increased WBC counts, monocytosis, and splenomegaly in WT recipient mice. These data indicate that Tet2-deficient mice recapitulate patients with myeloid malignancies, implying that Tet2 functions as a tumor suppressor to maintain hematopoietic cell homeostasis.