Cytosine methylation is the major covalent modification of mammalian genomic DNA and plays important roles in transcriptional regulation. The molecular mechanism underlying the enzymatic removal of this epigenetic mark, however, remains elusive. Here, we show that 5-methylcytosine (5mC) hydroxylase TET1, by converting 5mCs to 5-hydroxymethylcytosines (5hmCs), promotes DNA demethylation in mammalian cells through a process that requires the base excision repair pathway. Though expression of the 12 known human DNA glycosylases individually did not enhance removal of 5hmCs in mammalian cells, demethylation of both exogenously introduced and endogenous 5hmCs is promoted by the AID (activation-induced deaminase)/APOBEC (apolipoprotein B mRNA-editing enzyme complex) family of cytidine deaminases. Furthermore, Tet1 and Apobec1 are involved in neuronal activity-induced, region-specific, active DNA demethylation and subsequent gene expression in the dentate gyrus of the adult mouse brain in vivo. Our study suggests a TET1-induced oxidation-deamination mechanism for active DNA demethylation in mammals.