DNA methylation is a well-characterized epigenetic modification that plays central roles in mammalian development, genomic imprinting, X-chromosome inactivation and silencing of retrotransposon elements. Aberrant DNA methylation pattern is a characteristic feature of cancers and associated with abnormal expression of oncogenes, tumor suppressor genes or repair genes. Ten-eleven-translocation (TET) proteins are recently characterized dioxygenases that catalyze progressive oxidation of 5-methylcytosine to produce 5-hydroxymethylcytosine and further oxidized derivatives. These oxidized methylcytosines not only potentiate DNA demethylation but also behave as independent epigenetic modifications per se. The expression or activity of TET proteins and DNA hydroxymethylation are highly dysregulated in a wide range of cancers including hematologic and non-hematologic malignancies, and accumulating evidence points TET proteins as a novel tumor suppressor in cancers. Here we review DNA demethylation-dependent and -independent functions of TET proteins. We also describe diverse TET loss-of-function mutations that are recurrently found in myeloid and lymphoid malignancies and their potential roles in hematopoietic transformation. We discuss consequences of the deficiency of individual Tet genes and potential compensation between different Tet members in mice. Possible mechanisms underlying facilitated oncogenic transformation of TET-deficient hematopoietic cells are also described. Lastly, we address non-mutational mechanisms that lead to suppression or inactivation of TET proteins in cancers. Strategies to restore normal 5mC oxidation status in cancers by targeting TET proteins may provide new avenues to expedite the development of promising anti-cancer agents.