Ten eleven translocation (TET) enzymes (TET1/TET2/TET3) and thymine DNA glycosylase (TDG) play crucial roles in early embryonic and germ cell development by mediating DNA demethylation. However, the molecular mechanisms that regulate TETs/TDG expression and their role in cellular differentiation, including that of the pancreas, are not known. Here, we report that (i) TET1/2/3 and TDG can be direct targets of the microRNA miR-26a, (ii) murine TETs, especially TET2 and TDG, are down-regulated in islets during postnatal differentiation, whereas miR-26a is up-regulated, (iii) changes in 5-hydroxymethylcytosine accompany changes in TET mRNA levels, (iv) these changes in mRNA and 5-hydroxymethylcytosine are also seen in an in vitro differentiation system initiated with FACS-sorted adult ductal progenitor-like cells, and (v) overexpression of miR-26a in mice increases postnatal islet cell number in vivo and endocrine/acinar colonies in vitro. These results establish a previously unknown link between miRNAs and TET expression levels, and suggest a potential role for miR-26a and TET family proteins in pancreatic cell differentiation.