AID (activation-induced cytidine deaminase) catalyzes transcription-dependent deamination of C --> U in immunoglobulin variable (IgV) regions to initiate somatic hypermutation (SHM) in germinal center B-cells. SHM is essential in generating high affinity antibodies. Here we show that when coexpressed with GANP (germinal center-associated nuclear protein) in COS-7 cells, AID is transported from the cytoplasm and concentrated in the nucleus. GANP forms a complex with AID in cotransfected cells in vivo and in vitro. We have isolated AID mutants that bind with reduced affinity to GANP compared with wild type AID. One of these mutants, AID (D143A) binds GANP with a 10-fold lower affinity compared with wild type AID yet retains substantial C-deamination activity in vitro. Mutant AID (D143A) remains localized predominantly in the cytoplasm when coexpressed with GANP. Exogenous expression of GANP in Ramos B-cells promotes binding of AID to IgV DNA and mRNA and increases SHM frequency. These data suggest that GANP may serve as an essential link required to transport AID to B-cell nuclei and to target AID to actively transcribed IgV regions.