Induced regulatory T cells (iTregs) are generated from naive T cells in the presence of transforming growth factor-β (TGF-β). Since iTregs can be produced in a large quantity in vitro, these cells are expected to be clinically used as an inducer of tolerance in various immunological diseases. However, unlike Tregs developed in the thymus, Foxp3 expression in iTregs is unstable due to the lack of epigenetic modifications of Treg-specific demethylation regions (TSDRs), especially CpG motifs in the Foxp3 intronic element, conserved noncoding sequence 2 (CNS2). To facilitate demethylation of TSDRs, we have tried to overexpress the catalytic domain (CD) of the ten-eleven translocation (TET) protein, which catalyzes the steps of the iterative demethylation of 5-methylcytosine (5mC). By using retroviral gene transfer, we introduced the catalytic domain of the TET1 protein (TET-CD). TET-CD overexpression in iTreg cells resulted in partial demethylation of CNS2 in iTregs, and stable Foxp3 expression even in Th1 conditions. TET-CD-overexpressing iTregs had higher suppression activity and stability in vivo than iTregs without TET-CD expression. We found that TETs expression was enhanced by hypoxic culture conditions, and hypoxia facilitated DNA demethylation of CNS2 and stable Foxp3 expression in a TET2 and TET3-dependent manner. In combination of vitamin C, which has been reported to enhance TET catalytic activity, iTregs generated under hypoxic condition exhibited strongest suppression activity and Foxp3 stability in vivo. Our data indicate that induction of TET enzymes in iTregs would be an effective method for immunotherapy for autoimmune diseases, allergy and organ transplantation.