Even though the Ten-eleven translocation (TET) enzymes catalyze the generation of 5-hydroxymethylcytosines required for lineage commitment and subsequent differentiation of stem cells into erythroid cells, the mechanisms that link extracellular signals to TET activation and DNA hydroxymethylation are unknown. We demonstrate that hematopoietic cytokines phosphorylate TET2, leading to its activation in erythroid progenitors. Specifically, cytokine receptor-associated JAK2 phosphorylates TET2 at tyrosines 1939 and 1964. Phosphorylated TET2 interacts with the erythroid transcription factor KLF1, and this interaction with TET2 is increased upon exposure to erythropoietin. The activating JAK2V617F mutation seen in myeloproliferative disease patient samples and in mouse models is associated with increased TET activity and cytosine hydroxymethylation as well as genome-wide loss of cytosine methylation. These epigenetic and functional changes are also associated with increased expression of several oncogenic transcripts. Thus, we demonstrate that JAK2-mediated TET2 phosphorylation provides a mechanistic link between extracellular signals and epigenetic changes during hematopoiesis. SIGNIFICANCE: Identification of TET2 phosphorylation and activation by cytokine-stimulated JAK2 links extracellular signals to chromatin remodeling during hematopoietic differentiation. This provides potential avenues to regulate TET2 function in the context of myeloproliferative disorders and myelodysplastic syndromes associated with the JAK2V617F-activating mutation.This article is highlighted in the In This Issue feature, p. 681.