Class switch recombination, gene conversion, and somatic hypermutation that diversify rearranged Ig genes to produce various classes of high affinity Abs are dependent on the enzyme activation-induced cytosine deaminase (AID). Evidence suggests that somatic hypermutation is due to error-prone DNA repair that is initiated by AID-mediated deamination of cytosine in DNA, whereas the mechanism by which AID controls recombination remains to be elucidated. In this study, using a yeast model system, we have observed AID-dependent recombination. Expression of human AID in wild-type yeast is mutagenic for G-C to A-T transitions, and as expected, this mutagenesis is increased upon inactivation of uracil-DNA glycosylase. AID expression also strongly induces intragenic mitotic recombination, but only in a strain possessing uracil-DNA glycosylase. Thus, the initial step of base excision repair is required for AID-dependent recombination and is a branch point for either hypermutagenesis or recombination.