Only a few years ago it was demonstrated that mammalian DNA contains oxidized forms of 5-methylcytosine (5mC). The base 5-hydroxymethylcytosine (5hmC) is the most abundant of these oxidation products and is referred to as the sixth DNA base. 5hmC is produced from 5mC in an enzymatic pathway involving three 5mC oxidases, Ten-eleven translocation (TET)1, TET2, and TET3. The biological role of 5hmC is still unclear. Current models propose that 5hmC is an intermediate base in an active or passive DNA demethylation process that operates during important reprogramming phases of mammalian development. Tumors originating in various human tissues have strongly depleted levels of 5hmC. Apparently, 5hmC cannot be maintained in proliferating cells. Furthermore, mutations in the TET2 gene are commonly observed in human myeloid malignancies. Since TET proteins and many lysine demethylases require 2-oxoglutarate as a cofactor, aberrations in cofactor biochemical pathways, including mutations in isocitrate dehydrogenase (IDH), may affect levels of 5hmC and 5mC in certain types of tumors, either directly or indirectly. We discuss current data and models of the function of 5hmC in general, with special emphasis on its role in mechanisms of development and cancer.