5-Hydroxymethylcytosine (5hmC) is an epigenetic modification that is generated by ten-eleven translocation (TET) protein-mediated oxidation of 5-methylcytosine (5mC). 5hmC is associated with transcription regulation and is decreased in many cancers including melanoma. Accumulating evidence has suggested that 5hmC is functionally distinct from 5mC. Ubiquitin-like with PHD and ring finger domains 2 (UHRF2) is the first known specific 5hmC reader that has higher affinity to 5hmC than 5mC, suggesting that UHRF2 might mediate 5hmC's function. Structural analysis has revealed the molecular mechanism of UHRF2-5hmC binding in vitro, but it is not clear how UHRF2 recognizes 5hmC in vivo. In this study, we have identified zinc figure protein 618 (ZNF618) as a novel binding partner of UHRF2. ZNF618 specifically interacts with UHRF2 but not its paralog UHRF1. Importantly, ZNF618 co-localizes with UHRF2 at genomic loci that are enriched for 5hmC. The ZNF618 chromatin localization is independent of its interaction with UHRF2 and is through its first two zinc fingers. Instead, ZNF618 regulates UHRF2 chromatin localization. Collectively, our study suggests that ZNF618 is a key protein that regulates UHRF2 function as a specific 5hmC reader in vivo.DNA methylation is an epigenetic modification that regulates multiple cellular processes including gene transcription, genomic imprinting, and X chromosome inactivation. DNA methylation mainly exists as 5-methylcytosine (5mC) 3 in CpG context, which is established and maintained by three major DNA methyltransferases in cells (1). 5mC can be oxidized by ten-eleven translocation (TET) proteins to 5-hydroxymethylcytosine (5hmC), 5-formylcytosine (5fC), and 5-carboxylcytosine (5caC) (2-4). These 5mC derivatives are believed to be intermediates of DNA demethylation (5).5hmC is much more abundant than others among three 5mC derivatives (6). It is not a favorable substrate for further oxidation and is therefore most stable (7,8). It is widely present in many cell types and tissues and is particularly enriched in neurons and stem cells (9, 10). 5hmC and 5mC have different genome-wide distributions and are associated with different transcriptional outcome (11-16). Loss of 5hmC, but not 5mC, is a hallmark of many cancers including melanoma (17). These studies suggest that 5hmC is more than just an intermediate of DNA demethylation, but is an important epigenetic modification that is distinct from 5mC.The function of 5hmC is still not clear, largely due to the lack of knowledge about 5hmC readers. Previous studies have shown that some 5mC readers, such as UHRF1 and MeCP2, can also bind 5hmC (18,19). These proteins use the same 5mC-binding domain to interact with 5hmC, but the 5hmC binding affinity was similar to or weaker than their 5mC binding affinities (18,19). Recent proteomic approaches have revealed several 5hmC-specific binding proteins that have higher affinity to 5hmC than 5mC (20). UHRF2 is the best characterized one and its SRA domain has 3-fold higher binding affinity to 5hmC than 5m...