5-Hydroxymethylcytosine (hmC) was recently discovered as a new constituent of mammalian DNA. Besides 5-methylcytosine (mC), it is the only other modified base in higher organisms. The discovery is of enormous importance because it shows that the methylation of cytosines to imprint epigenetic information is not a final chemical step that leads to gene silencing but that further chemistry occurs at the methyl group that might have regulatory function. Recent progress in hmC detection—most notably LC-MS and glucosyltransferase assays-helped to decipher the precise distribution of hmC in the body. This led to the surprising finding that, in contrast to constant mC levels, the hmC levels are strongly tissue-specific. The highest values of hmC are found in the central nervous system. It was furthermore discovered that hmC is involved in regulating the pluripotency of stem cells and that it is connected to the processes of cellular development and carcinogenesis. Evidence is currently accumulating that hmC may not exclusively be an intermediate of an active demethylation process, but that it functions instead as an important epigenetic marker.