In myeloid malignancies, mutations have occurred in epigenetic regulator genes, including Ten-Eleven-Translocation 2 (TET2). TET2 is an enzyme that catalyzes the conversion of 5-methylcytosine into 5-hydroxymethylcytosine (5-hmC) which is a key intermediate for oxidative DNA demethylation. We analyzed the in vivo phenotype of TET2 failure using Ayu17-449 (TET2(trap/trap)) mice created by the gene-trap method in which TET2 mRNA levels were decreased to about 20% of the level in wild-type (WT) mice. In TET2(trap/trap) mice the levels of 5-hmC in genomic DNA from bone marrow (BM) cells were decreased in comparison to WT mice. TET2(trap/trap) mice were born at an expected Mendelian frequency but died at a high rate by postnatal day 3, indicating TET2 to be essential for survival. In analysis of the hematopoietic system, transplantation of TET2(trap/trap), but not WT fetal liver cells, led to mild myeloid hyperplasia and splenomegaly in WT recipient mice, but no onsets of lethal hematological malignancies were observed during a follow-up period of 12 months. TET2 knockdown led to an increased serial replating capacity of BM cells in vitro and increased hematopoietic stem cell (HSC) self-renewal in vivo in competitive repopulation and serial transplantation assays. These data indicate that TET2 has a critical role in survival and HSC homeostasis.