Neurons harbor high levels of single-strand DNA breaks (SSBs) that are targeted to neuronal enhancers, but the source of this endogenous damage remains unclear. Using two systems of postmitotic lineage specification—induced pluripotent stem cell–derived neurons and transdifferentiated macrophages—we show that thymidine DNA glycosylase (TDG)–driven excision of methylcytosines oxidized with ten-eleven translocation enzymes (TET) is a source of SSBs. Although macrophage differentiation favors short-patch base excision repair to fill in single-nucleotide gaps, neurons also frequently use the long-patch subpathway. Disrupting this gap-filling process using anti-neoplastic cytosine analogs triggers a DNA damage response and neuronal cell death, which is dependent on TDG. Thus, TET-mediated active DNA demethylation promotes endogenous DNA damage, a process that normally safeguards cell identity but can also provoke neurotoxicity after anticancer treatments.