Recent studies have shown that DNA demethylation goes through the conversion of 5-methylcytosine (5mC) to 5-hydroxymethylcytosine (5hmC) by Tet proteins. However, it is still unclear how the target regions for demethylation are distinguished within their genomic context. Here we show that the nuclear receptor peroxisome proliferator-activated receptor-γ (PPARγ) has the ability to direct local demethylation around its binding sites, the PPAR response elements (PPREs), during adipocyte differentiation. PPARγ is a key regulator of the differentiation process that forms a PPARγ co-activator complex on PPREs and activates the expression of adipocyte-specific genes. The complex is poly(ADP-ribosyl)ated (PARylated) on PPREs, and Tet proteins catalyse the conversion of 5mC to 5hmC locally by their ability to bind to the PAR polymer, thereby inducing region-specific demethylation. Our study demonstrates that a sequence-dependent transcription factor complex can, through its post-translational modification, serve for Tet proteins as a landmark to identify sites of DNA demethylation.