Epigenetic regulation plays an important role in governing stem cell fate and tumorigenesis. Lost expression of a key DNA demethylation enzyme TET2 is associated with human cancers and has been linked to stem cell traits in vitro; however, whether and how TET2 regulates mammary stem cell fate and mammary tumorigenesis in vivo remains to be determined. Here, using our recently established mammary specific Tet2 deletion mouse model, the data reveals that TET2 plays a pivotal role in mammary gland development and luminal lineage commitment. We show that TET2 and FOXP1 form a chromatin complex that mediates demethylation of ESR1, GATA3, and FOXA1, three key genes that are known to coordinately orchestrate mammary luminal lineage specification and endocrine response, and also are often silenced by DNA methylation in aggressive breast cancers. Furthermore, Tet2 deletion-PyMT breast cancer mouse model exhibits enhanced mammary tumor development with deficient ERα expression that confers tamoxifen resistance in vivo. As a result, this study elucidates a role for TET2 in governing luminal cell differentiation and endocrine response that underlies breast cancer resistance to anti-estrogen treatments.