Aims: In addition to pineal gland, many cells, tissues, and organs also synthesize melatonin (N-acetyl-5methoxytryptamine). Embryos are a group of special cells and whether they can synthesize melatonin is still an open question. However, melatonin application promoted embryo development in many species in in vitro condition. The purpose of this study was to investigate whether embryos can synthesize melatonin; if it is so, what are the impacts of the endogenously produced melatonin on embryo development and the associated molecular mechanisms. These have never been reported previously. Results: Melatonin synthesis was observed at different stages of embryonic development. Aanat (aralkylamine N-acetyltransferase), a rate-limiting enzyme for melatonin production, was found to mostly localize in the mitochondria. Aanat knockdown significantly impeded embryonic development, and melatonin supplementation rescued it. The potential mechanisms might be that melatonin preserved mitochondrial intact and its function, thus providing sufficient adenosine 5¢-triphosphate for the embryo development. In addition, melatonin scavenged intracellular reactive oxygen species (ROS) and reduced the DNA mutation induced by oxidative stress. In the molecular level, Aanat knockdown reduced tet methylcytosine dioxygenase 2 (Tet2) expression and DNA demethylation in blastocyst and melatonin supplementation rescued these processes. Innovation: This is the first report to show that embryos synthesize melatonin, and its synthetic enzyme Aanat was located in the mitochondria of embryos. An effect of melatonin is to maintain Tet2 expression and normal methylation status, and thereby promote embryonic development. Conclusion: Embryos can produce melatonin that reduces ROS production, preserves mitochondrial function, and maintains Tet2 expression and the normal DNA methylation.