Execution of lineage-specific differentiation programs requires tight coordination between many regulators including Ten-eleven translocation (TET) family enzymes, catalyzing 5-methylcytosine oxidation in DNA. Here, by using Keratin 14-Cre-driven ablation of Tet genes in skin epithelial cells, we demonstrate that ablation of Tet2/Tet3 results in marked alterations of hair shape and length followed by hair loss. We show that, through DNA demethylation, Tet2/Tet3 control chromatin accessibility and Dlx3 binding and promoter activity of the Krt25 and Krt28 genes regulating hair shape, as well as regulate interactions between the Krt28 gene promoter and distal enhancer. Moreover, Tet2/Tet3 also control three-dimensional chromatin topology in Keratin type I/II gene loci via DNA methylation-independent mechanisms. These data demonstrate the essential roles for Tet2/3 in establishment of lineage-specific gene expression program and control of Dlx3/Krt25/Krt28 axis in hair follicle epithelial cells and implicate modulation of DNA methylation as a novel approach for hair growth control.