Processing of AID (activation-induced cytidine deaminase)-dependent dU:dG mismatches by the base excision repair (BER) and mismatch repair (MMR) pathways generates untemplated mutations during somatic hypermuation (SHM) or DNA breaks during class switch recombination (CSR). Genetic deletion of UNG or MSH2, which are essential for BER or MMR, respectively, impairs CSR and alters the spectrum of mutations in SHM. Ablation of both UNG and MSH2 completely blocks CSR and limits SHM to GC transition mutations. Phosphorylation of AID at Ser38 (pS38-AID) is required for wild-type levels of CSR and SHM. B cells with a homozygous knock-in mutation of the AID phosphorylation site (AIDS38A/S38A) have intermediate levels of CSR and SHM as compared to wild-type and AID−/− B cells. AID phosphorylation is hypothesized to regulate BER through the interaction of pS38-AID with APE1, which functions downstream of UNG. Consistent with this hypothesis, AIDS38A/S38AMSH2−/− B cells have a complete block in CSR and significantly impaired SHM of Sμ and the JH4 intron. Surprisingly, CSR is also completely blocked in AIDS38A/S38AUNG−/− B cells; however, these cells generate significant mutations in Sμ and JH4 intron. These data demonstrate a critical role for pS38-AID in regulating BER and MMR and uncover a novel pS38-AID-dependent mechanism of mediating MMR-dependent DNA break formation and/or ligation during CSR.