Growth arrest and DNA-damage-inducible protein 45 (Gadd45) family members have been implicated in DNA demethylation in vertebrates. However, it remained unclear how they contribute to the demethylation process. Here, we demonstrate that Gadd45a promotes active DNA demethylation through thymine DNA glycosylase (TDG) which has recently been shown to excise 5-formylcytosine (5fC) and 5-carboxylcytosine (5caC) generated in Ten-eleven-translocation (Tet)—initiated oxidative demethylation. The connection of Gadd45a with oxidative demethylation is evidenced by the enhanced activation of a methylated reporter gene in HEK293T cells expressing Gadd45a in combination with catalytically active TDG and Tet. Gadd45a interacts with TDG physically and increases the removal of 5fC and 5caC from genomic and transfected plasmid DNA by TDG. Knockout of both Gadd45a and Gadd45b from mouse ES cells leads to hypermethylation of specific genomic loci most of which are also targets of TDG and show 5fC enrichment in TDG-deficient cells. These observations indicate that the demethylation effect of Gadd45a is mediated by TDG activity. This finding thus unites Gadd45a with the recently defined Tet-initiated demethylation pathway.