The chromosomal protein SMCHD1 regulates DNA methylation and the 2c-like state of embryonic stem cells by antagonizing TET proteins

5-Methylcytosine (5mC) oxidases, the ten-eleven translocation (TET) proteins, initiate DNA demethylation, but it is unclear how 5mC oxidation is regulated. We show that the protein SMCHD1 (structural maintenance of chromosomes flexible hinge domain containing 1) is found in complexes with TET proteins and negatively regulates TET activities. Removal of SMCHD1 from mouse embryonic stem (ES) cells induces DNA hypomethylation, preferentially at SMCHD1 target sites and accumulation of 5-hydroxymethylcytosine (5hmC), along with promoter demethylation and activation of the Dux double-homeobox gene. In the absence of SMCHD1, ES cells acquire a two-cell (2c) embryo–like state characterized by activation of an early embryonic transcriptome that is substantially imposed by Dux. Using Smchd1/Tet1/Tet2/Tet3 quadruple-knockout cells, we show that DNA demethylation, activation of Dux, and other genes upon SMCHD1 loss depend on TET proteins. These data identify SMCHD1 as an antagonist of the 2c-like state of ES cells and of TET-mediated DNA demethylation.