Enzymes of the ten-eleven translocation (TET) family add diversity to the repertoire of nucleobase modifications by catalyzing the oxidation of 5-methylcytosine (5mC). TET enzymes were initially found to oxidize 5-methyl-2'-deoxycytidine in genomic DNA, yielding products that contribute to epigenetic regulation in mammalian cells, but have since been found to also oxidize 5-methylcytidine in RNA. Considering the different configurations of single-stranded (ss) and double-stranded (ds) DNA and RNA that coexist in a cell, defining the scope of TET's preferred activity and the mechanisms of substrate selectivity is critical to better understand the enzymes' biological functions. To this end, we have systematically examined the activity of human TET2 on DNA, RNA, and hybrid substrates in vitro. We found that, while ssDNA and ssRNA are well tolerated, TET2 is most proficient at dsDNA oxidation and discriminates strongly against dsRNA. Chimeric and hybrid substrates containing mixed DNA and RNA character helped reveal two main features by which the enzyme discriminates between substrates. First, the identity of the target nucleotide alone is the strongest reactivity determinant, with a preference for 5-methyldeoxycytidine, while both DNA or RNA are relatively tolerated on the rest of the target strand. Second, while a complementary strand is not required for activity, DNA is the preferred partner, and complementary RNA diminishes reactivity. Our biochemical analysis, complemented by molecular dynamics simulations, provides support for an active site optimally configured for dsDNA reactivity but permissive for various nucleic acid configurations, suggesting a broad range of plausible roles for TET-mediated 5mC oxidation in cells.