BACKGROUND: Ten-eleven translocation (TET) enzymes oxidise DNA methylation as part of an active demethylation pathway. Despite extensive research into the role of TETs in genome regulation, little is known about their effect on transposable elements (TEs), which make up nearly half of the mouse and human genomes. Epigenetic mechanisms controlling TEs have the potential to affect their mobility and to drive the co-adoption of TEs for the benefit of the host. RESULTS: We performed a detailed investigation of the role of TET enzymes in the regulation of TEs in mouse embryonic stem cells (ESCs). We find that TET1 and TET2 bind multiple TE classes that harbour a variety of epigenetic signatures indicative of different functional roles. TETs co-bind with pluripotency factors to enhancer-like TEs that interact with highly expressed genes in ESCs whose expression is partly maintained by TET2-mediated DNA demethylation. TETs and 5-hydroxymethylcytosine (5hmC) are also strongly enriched at the 5' UTR of full-length, evolutionarily young LINE-1 elements, a pattern that is conserved in human ESCs. TETs drive LINE-1 demethylation, but surprisingly, LINE-1s are kept repressed through additional TET-dependent activities. We find that the SIN3A co-repressive complex binds to LINE-1s, ensuring their repression in a TET1-dependent manner. CONCLUSIONS: Our data implicate TET enzymes in the evolutionary dynamics of TEs, both in the context of exaptation processes and of retrotransposition control. The dual role of TET action on LINE-1s may reflect the evolutionary battle between TEs and the host.