Overexpression of fibroblast growth factor receptor 3 (FGFR3) correlates with more severe clinical features of hepatocellular carcinoma (HCC). Our previous study has shown that FGFR3∆7-9, a novel splicing mutation of FGFR3, contributes significantly to HCC malignant character, but the epigenetic mechanism is still elusive. In this study, through mass spectrometry and co-immunoprecipitation studies, we discover a close association between FGFR3∆7-9 and the DNA demethylase Ten-Eleven Translocation-2 (TET2). Unlike other certain types of cancer, mutation of TET2 is rare in HCC. However, activation of FGFR3∆7-9 by FGF1 dramatically shortens TET2 half-life. FGFR3∆7-9, but not wild-type FGFR3, directly interacts with TET2 and phosphorylates TET2 at Y1902 site, leading to the ubiquitination and proteasome-mediated degradation of TET2. Overexpression of a phospho-deficient mutant TET2 (Y1902F) significantly reduces the oncogenic potential of FGFR3∆7-9 in vitro and in vivo. Furthermore, FGFR3∆7-9 significantly enhances HCC cell proliferation through the TET2-PTEN-AKT pathway. Specifically, TET2 offsets the elevation of p-AKT level induced by FGFR3∆7-9 through directly binding to PTEN promoter and increasing 5-hmC. Therefore, through phosphorylation and inhibition of TET2, FGFR3∆7-9 reduces PTEN expression and substantiates AKT activation to stimulate HCC proliferation. Together, this study identifies TET2 as a key regulator of the oncogenic role of FGFR3∆7-9 in HCC carcinogenesis and sheds light on new therapeutic strategies for HCC treatment.