The AID/APOBEC family of enzymes in higher vertebrates converts cytosines in DNA or RNA to uracil. They play a role in antibody maturation and innate immunity against viruses, and have also been implicated in the demethylation of DNA during early embryogenesis. This is based in part on reported ability of activation-induced deaminase (AID) to deaminate 5-methylcytosines (5mC) to thymine. We have reexamined this possibility for AID and two members of human APOBEC3 family using a novel genetic system in Escherichia coli. Our results show that while all three genes show strong ability to convert C to U, only APOBEC3A is an efficient deaminator of 5mC. To confirm this, APOBEC3A was purified partially and used in an in vitro deamination assay. We found that APOBEC3A can deaminate 5mC efficiently and this activity is comparable to its C to U deamination activity. When the DNA-binding segment of AID was replaced with the corresponding segment from APOBEC3A, the resulting hybrid had much higher ability to convert 5mC to T in the genetic assay. These and other results suggest that the human AID deaminates 5mC's only weakly because the 5-methyl group fits poorly in its DNA-binding pocket.