Neurons harbor high levels of single-strand DNA breaks (SSBs) that are targeted to neuronal enhancers, but the source of this endogenous damage remains unclear. Using two systems of postmitotic lineage specification-induced pluripotent stem cell-derived neurons and transdifferentiated macrophages-we show that thymidine DNA glycosylase (TDG)-driven excision of methylcytosines oxidized with ten-eleven translocation enzymes (TET) is a source of SSBs. Although macrophage differentiation favors short-patch base excision repair to fill in single-nucleotide gaps, neurons also frequently use the long-patch subpathway. Disrupting this gap-filling process using anti-neoplastic cytosine analogs triggers a DNA damage response and neuronal cell death, which is dependent on TDG. Thus, TET-mediated active DNA demethylation promotes endogenous DNA damage, a process that normally safeguards cell identity but can also provoke neurotoxicity after anticancer treatments.