Removal of cytosine methylation from the genome is critical for reprogramming and transdifferentiation and plays a central role in our understanding of the fundamental principles of embryo lineage development. One of the major models for studying cytosine demethylation is the mammalian germ line during the primordial germ cell (PGC) stage of embryo development. It is now understood that oxidation of 5-methylcytosine (5mC) to 5-hydroxymethylcytosine (5hmC) is required to remove cytosine methylation in a locus-specific manner in PGCs; however, the mechanisms downstream of 5hmC are controversial and hypothesized to involve either active demethylation or replication-coupled loss. In the current study, we used the aorta-gonad-mesonephros (AGM) organ culture model to show that this model recapitulates germ line reprogramming, including 5hmC reorganization and loss of cytosine methylation from Snrpn and H19 imprinting control centers (ICCs). To directly address the hypothesis that cell proliferation is required for cytosine demethylation, we blocked PI3-kinase-dependent PGC proliferation and show that this leads to a G1 and G2/M cell cycle arrest in PGCs, together with retained levels of cytosine methylation at the Snrpn ICC, but not at the H19 ICC. Taken together, the AGM organ culture model is an important tool to evaluate mechanisms of locus-specific demethylation and the role of PI3-kinase-dependent PGC proliferation in the locus-specific removal of cytosine methylation from the genome.