Tet-enzyme-mediated 5-hydroxymethylation of cytosines in DNA plays a crucial role in mouse embryonic stem cells (ESCs). In RNA also, 5-hydroxymethylcytosine (5hmC) has recently been evidenced, but its physiological roles are still largely unknown. Here we show the contribution and function of this mark in mouse ESCs and differentiating embryoid bodies. Transcriptome-wide mapping in ESCs reveals hundreds of messenger RNAs marked by 5hmC at sites characterized by a defined unique consensus sequence and particular features. During differentiation a large number of transcripts, including many encoding key pluripotency-related factors (such as Eed and Jarid2), show decreased cytosine hydroxymethylation. Using Tet-knockout ESCs, we find Tet enzymes to be partly responsible for deposition of 5hmC in mRNA. A transcriptome-wide search further reveals mRNA targets to which Tet1 and Tet2 bind, at sites showing a topology similar to that of 5hmC sites. Tet-mediated RNA hydroxymethylation is found to reduce the stability of crucial pluripotency-promoting transcripts. We propose that RNA cytosine 5-hydroxymethylation by Tets is a mark of transcriptome flexibility, inextricably linked to the balance between pluripotency and lineage commitment.