In the mammalian genome, cytosine methylation predominantly occurs at CpG sites. In addition, a number of recent studies have uncovered extensive C5 cytosine methylation (5mC) at non-CpG (5mCpH, where H = A/C/T) sites. Little is known about the enzyme responsible for active demethylation of 5mCpH sites. Using a very sensitive and quantitative LC–MS/MS method, we demonstrate that the human TET2, an iron (II)- and 2OG-dependent dioxygenase, which is a frequently mutated gene in several myeloid malignancies, as well as in a number of other types of cancers, can oxidize 5mCpH sites in double-stranded DNA in vitro. Similar to oxidation of 5mCpG, oxidation of 5mC at CpH sites produces 5-hydroxymethylcytosine (5hmC), 5-formylcytosine (5fC), and 5-carboxycytosine (5caC) bases in DNA. After 5mCpG, which is the most preferred substrate, TET2 prefers 5mCpC as a substrate, followed by 5mCpA and then 5mCpT. Since the TDG/BER pathway and deformylation or decarboxylation of 5fC or 5caC, respectively, can convert 5fCpH and 5caCpH to an unmodified cytosine base in DNA, our results suggest a novel demethylation pathway of 5mCpH sites initiated by TET2 dioxygenase.