DNA methylation at the 5-position of cytosines (5 mC) represents an important epigenetic modification involved in tissue differentiation and is frequently altered in cancer. Recent evidence suggests that 5 mC can be converted to 5-hydroxymethylcytosine (5 hmC) in an enzymatic process involving members of the TET protein family. Such 5 hmC modifications are known to be prevalent in DNA of embryonic stem cells and in the brain, but the distribution of 5 hmC in the majority of embryonic and adult tissues has not been rigorously explored. Here, we describe an immunohistochemical detection method for 5 hmC and the application of this technique to study the distribution of 5 hmC in a large set of mouse and human tissues. We found that 5 hmC was abundant in the majority of embryonic and adult tissues. Additionally, the level of 5 hmC closely tracked with the differentiation state of cells in hierarchically organized tissues. The highest 5 hmC levels were observed in terminally differentiated cells, while less differentiated tissue stem/progenitor cell compartments had very low 5 hmC levels. Furthermore, 5 hmC levels were profoundly reduced in carcinoma of the prostate, breast and colon compared to normal tissues. Our findings suggest a distinct role for 5 hmC in tissue differentiation, and provide evidence for its large-scale loss in cancers.