Apolipoprotein B-editing complex catalytic subunit 1 (APOBEC1) is the catalytic component of an RNA-editing complex that deaminates C6666 --> U in apolipoprotein B RNA in gastrointestinal tissue, thereby generating a premature stop codon. Whereas RNA is the physiological substrate of APOBEC1, recent experiments have strongly indicated that, when expressed in bacteria, APOBEC1 and some of its homologues can deaminate cytosine in DNA. Indeed, genetic evidence demonstrates that the physiological function of activation-induced deaminase, a B lymphocyte-specific APOBEC1 homologue, is to perform targeted deamination of cytosine within the immunoglobulin locus, thereby triggering antibody gene diversification. However, biochemical evidence of in vitro DNA deamination by members of the APOBEC family is still needed. Here, we show that deamination of cytosine to uracil in DNA can be achieved in vitro using partially purified APOBEC1 from extracts of transformed Escherichia coli. Thus, APOBEC1 can deaminate cytosine in both RNA and DNA. Strikingly, its activity on DNA is specific for single-stranded DNA and exhibits dependence on local sequence context.