The ten-eleven translocation 1 (TET1) gene is the founding member of the TET family of enzymes (TET1/2/3) that convert 5-methylcytosine to 5-hydroxymethylcytosine. Although TET1 was first identified as a fusion partner of the mixed lineage leukemia (MLL) gene in acute myeloid leukemia carrying t(10,11), its definitive role in leukemia is unclear. In contrast to the frequent down-regulation (or loss-of-function mutations) and critical tumor-suppressor roles of the three TET genes observed in various types of cancers, here we show that TET1 is a direct target of MLL-fusion proteins and is significantly up-regulated in MLL-rearranged leukemia, leading to a global increase of 5-hydroxymethylcytosine level. Furthermore, our both in vitro and in vivo functional studies demonstrate that Tet1 plays an indispensable oncogenic role in the development of MLL-rearranged leukemia, through coordination with MLL-fusion proteins in regulating their critical cotargets, including homeobox A9 (Hoxa9)/myeloid ecotropic viral integration 1 (Meis1)/pre-B-cell leukemia homeobox 3 (Pbx3) genes. Collectively, our data delineate an MLL-fusion/Tet1/Hoxa9/Meis1/Pbx3 signaling axis in MLL-rearranged leukemia and highlight TET1 as a potential therapeutic target in treating this presently therapy-resistant disease.