Ten-Eleven-Translocation 2 (TET2) is an enzyme that catalyzes the conversion of 5-methylcytosine into 5-hydroxymethylcytosine (5-hmC) and thereby alters the epigenetic state of DNA; somatic loss-of-function mutations of TET2 are frequently observed in patients with diverse myeloid malignancies. To study the function of TET2 in vivo, we analyzed Ayu17-449 (TET2(trap)) mice, in which a gene trap insertion in intron 2 of TET2 reduces TET2 mRNA levels to about 20% of that found in wild-type (WT) mice. TET2(trap/trap) mice were born at Mendelian frequency but died at a high rate by postnatal day 3, indicating the essential role of TET2 for survival. Loss of TET2 results in an increase in the number of hematopoietic stem cells (HSCs)/progenitors in the fetal liver, and TET2(trap/trap) HSCs exhibit an increased self-renewal ability in vivo. In competitive transplantation assays, TET2(trap/trap) HSCs possess a competitive growth advantage over WT HSCs. These data indicate that TET2 has a critical role in survival and HSC homeostasis.