Discovery of activation-induced cytidine deaminase (AID) paved a new path to unite two genetic alterations induced by antigen stimulation; class switch recombination (CSR) and somatic hypermutation (SHM). AID is now established to cleave specific target DNA and to serve as engraver of these genetic alterations. AID of a 198-residue protein has four important domains: nuclear localization signal and SHM-specific region at the N-terminus; the alpha-helical segment (residue 47-54) responsible for dimerization; catalytic domain (residues 56-94) shared by all the other cytidine deaminase family members; and nuclear export signal overlapping with class switch-specific domain at the C-terminus. Two alternative models have been proposed for the mode of AID action; whether AID directly attacks DNA or indirectly through RNA editing. Lines of evidence supporting RNA editing hypothesis include homology in various aspects with APOBEC1, a bona fide RNA editing enzyme as well as requirement of de novo protein synthesis for DNA cleavage by AID in CSR and SHM. This chapter critically evaluates DNA deamination hypothesis and describes evidence to indicate UNG is involved not in DNA cleavage but in DNA repair of CSR. In addition, UNG appears to have a noncanonical function through interaction with an HIV Vpr-like protein at the WXXF motif. Taken together, RNA editing hypothesis is gaining the ground.