Numerous chromatin regulators are required for embryonic stem (ES) cell 
self-renewal and pluripotency, but few have been studied in detail. Here, we 
examine the roles of several chromatin regulators whose loss affects the 
pluripotent state of ES cells. We find that Mbd3 and Brg1 antagonistically 
regulate a common set of genes by regulating promoter nucleosome occupancy. 
Furthermore, both Mbd3 and Brg1 play key roles in the biology of 
5-hydroxymethylcytosine (5hmC): Mbd3 colocalizes with Tet1 and 5hmC in vivo, 
Mbd3 knockdown preferentially affects expression of 5hmC-marked genes, Mbd3 
localization is Tet1-dependent, and Mbd3 preferentially binds to 5hmC relative 
to 5-methylcytosine in vitro. Finally, both Mbd3 and Brg1 are themselves 
required for normal levels of 5hmC in vivo. Together, our results identify an 
effector for 5hmC, and reveal that control of gene expression by antagonistic 
chromatin regulators is a surprisingly common regulatory strategy in ES cells.