A contribution of epigenetic modifications to B cell tolerance has been proposed but not directly tested. Here we report that deficiency of ten-eleven translocation (Tet) DNA demethylase family members Tet2 and Tet3 in B cells led to hyperactivation of B and T cells, autoantibody production and lupus-like disease in mice. Mechanistically, in the absence of Tet2 and Tet3, downregulation of CD86, which normally occurs following chronic exposure of self-reactive B cells to self-antigen, did not take place. The importance of dysregulated CD86 expression in Tet2- and Tet3-deficient B cells was further demonstrated by the restriction, albeit not complete, on aberrant T and B cell activation following anti-CD86 blockade. Tet2- and Tet3-deficient B cells had decreased accumulation of histone deacetylase 1 (HDAC1) and HDAC2 at the Cd86 locus. Thus, our findings suggest that Tet2- and Tet3-mediated chromatin modification participates in repression of CD86 on chronically stimulated self-reactive B cells, which contributes, at least in part, to preventing autoimmunity.