Activation-induced cytidine deaminase (AID) initiates antibody diversification processes by deaminating immunoglobulin sequences. Since transcription of target genes is required for deamination in vivo and AID exclusively mutates single-stranded DNA (ssDNA) in vitro, AID has been postulated to mutate transcription bubbles. However, since ssDNA generated by transcription can assume multiple structures, it is unknown which of these are targeted in vivo. Here we examine the enzymatic and binding properties of AID for different DNA structures. We report that AID has minimal activity on stem-loop structures and preferentially deaminates five-nucleotide bubbles. We compared AID activity on cytidines placed at various distances from the single-stranded/double-stranded DNA junction of bubble substrates and found that the optimal target consists of a single-stranded NWRCN motif. We also show that high-affinity binding is required for but does not necessarily lead to efficient deamination. Using nucleotide analogues, we show that AID's WRC preference (W ؍ A or T; R ؍ A or G) involves the recognition of a purine in the R position and that the carbonyl or amino side chains of guanosine negatively influence specificity at the W position. Our results indicate that AID is likely to target short-tract regions of ssDNA produced by transcription elongation and that it requires a fully single-stranded WRC motif.Somatic hypermutation and class switch recombination (CSR) are characteristic of the secondary immune response (21, 27). Somatic hypermutation, CSR, and immunoglobulin gene conversion all require the enzyme activation-induced cytidine deaminase (AID) (1,20,30,36,37,46). AID likely initiates these processes by deaminating cytidine to uridine exclusively within single-stranded DNA (ssDNA) regions (7,16,17,24,40,41,43,51). Despite the many advances made over the last few years in the field of antibody diversification, many questions still exist regarding the regulation and biochemical mechanism of AID, in particular its target selection.AID activity is believed to be regulated through interaction with cofactors (8) and through posttranslational modification (3,33,38). On the other hand, the basic enzymatic properties of AID itself are also crucial determinants of its activity. First, we and others found that purified AID preferentially mutates cytidines in WRC motifs (W is A or T; R is A or G) (24,25,41,58). Findings that CSR breakpoints occur at WRC motifs (22,61) and that this specificity is highly conserved (53) argue that the sequence preference inherent to AID plays a significant biological role. Second, AID deaminates ssDNA processively in vitro (41), and evidence for this type of activity has been documented for mice (55). Third, we recently showed that AID binds single-stranded or bubble-type DNA substrates with high affinity and a long half-life, irrespective of nucleotide sequence (25).The mechanism that targets AID to immunoglobulin (Ig) genes is not known. Although cis-acting sequences that reside within the Ig...