Epigenetic mechanisms are essential to establish and safeguard cellular identities in mammals. They dynamically regulate the expression of genes, transposable elements and higher-order chromatin structures. Consequently, these chromatin marks are indispensable for mammalian development and alterations often lead to disease, such as cancer. Bivalent promoters are especially important during differentiation and development. Here we used a genetic screen to identify new regulators of a bivalent repressed gene. We identify BEND3 as a regulator of hundreds of bivalent promoters, some of which it represses, and some of which it activates. We show that BEND3 is recruited to a CpG-containg consensus site that is present in multiple copies in many bivalent promoters. Besides having direct effect on the promoters it binds, the loss of BEND3 leads to genome-wide gains of DNA methylation, which are especially marked at regions normally protected by the TET enzymes. DNA hydroxymethylation is reduced in Bend3 mutant cells, possibly as consequence of altered gene expression leading to diminished alpha-ketoglutarate production, thus lowering TET activity. Our results clarify the direct and indirect roles of an important chromatin regulator, BEND3, and, more broadly, they shed light on the regulation of bivalent promoters.