Updated project metadata. Precise regulation of DNA methylation in mammals is critical for genome stability and epigenetic regulation. The discovery of the ten-eleven translocation (TET) proteins catalyzing the oxidation from 5-methylcytosine (5mC) to 5-hydroxymethylcytosine (5hmC), 5-formylcytosine (5fC), and 5-carboxylcytosine (5caC) revolutionized the perspective on the complexity and regulation of DNA modifications. Despite accumulating knowledge about the role of TET1, it remains unclear to what extent these can be attributed to its catalytic activity. Here, we use genome engineering and quantitative multi-omics approaches to dissect the role and mechanism of TET1 in mESCs. Our study identifies TET1 as an essential interaction hub for multiple chromatin modifying complexes and as a global regulator of histone modifications. Strikingly, we find that the majority of transcriptional regulation depends on non-catalytic functions of TET1. Moreover, we show that the establishment of H3K9me3 and H4K20me3 at ERV1, ERVK, and ERVL is mediated by TET1 independent of DNA demethylation. We provide evidence that repression of endogenous retroviruses depends on the interaction between TET1 and SIN3A. In summary, we demonstrate that the non-catalytic functions of TET1 are critical for regulation of gene expression and the silencing of endogenous retroviruses in mESCs.