The methylcytosine oxidase TET proteins play important roles in DNA demethylation and development. However, it remains elusive how exactly they target substrates and execute oxidation. Interestingly, we found that, in mice, the full-length TET1 isoform (TET1e) is restricted to early embryos, embryonic stem cells (ESCs), and primordial germ cells (PGCs). By contrast, a short isoform (TET1s) is preferentially expressed in somatic cells, which lacks the N terminus including the CXXC domain, a DNA-binding module that often recognizes CpG islands (CGIs) where TET1 predominantly occupies. Unexpectedly, TET1s can still bind CGIs despite the fact that its global chromatin binding is significantly reduced. Interestingly, global chromatin binding, but not targeted binding at CGIs, is correlated with TET1-mediated demethylation. Finally, mice with exclusive expression of Tet1s failed to erase imprints in PGCs and displayed developmental defects in progeny. These data show that isoform switch of TET1 regulates epigenetic memory erasure and mouse development.