Hypermethylation of tumor suppressor gene (TSG) promoters confers growth advantages to cancer cells, but how these changes arise is poorly understood. Here, we report that tumor hypoxia reduces the activity of oxygen-dependent TET enzymes, which catalyze DNA de-methylation through 5-methylcytosine oxidation. This occurs independently of hypoxia-associated alterations in TET expression, proliferation, metabolism, HIF activity or reactive oxygen, but directly depends on oxygen shortage. Hypoxia-induced loss of TET activity increases hypermethylation at gene promoters in vitro. Also in patients, TSG promoters are markedly more methylated in hypoxic tumors, independently of proliferation, stromal cell infiltration and tumor characteristics. Our data suggest cellular selection of hypermethylation events, with almost half of them being ascribable to hypoxia across tumor types. Accordingly, increased hypoxia after vessel pruning in murine breast tumors increases hypermethylation, while restored tumor oxygenation by vessel normalization abrogates this effect. Tumor hypoxia thus acts as a novel regulator underlying DNA methylation.