Activation‐induced cytidine deaminase (AID) mediates antibody diversification by deaminating deoxycytidines to deoxyuridine within immunoglobulin genes. However, it also generates genome‐wide DNA lesions, leading to transformation. Though the biochemical properties of AID have been described, its 3‐dimensional structure has not been determined. Hence, to investigate the relationship between the primary structure and biochemical characteristics of AID, we compared the properties of human and bony fish AID, since these are most divergent in amino acid sequence. We show that AIDs of various species have different catalytic rates that are thermosensitive and optimal at native physiological temperatures. Zebrafish AID is severalfold more catalytically robust than human AID, while catfish AID is least active. This disparity is mediated by a single amino acid difference in the C terminus. Using functional assays supported by models of AID core and surface structure, we show that this residue modulates activity by affecting ssDNA binding. Furthermore, the cold‐adapted catalytic rates of fish AID result from increased ssDNA binding affinity at lower temperatures. Our work suggests that AID may generate DNA damage with variable efficiencies in different organisms, identifies residues critical in regulating AID activity, and provides insights into the evolution of the APOBEC family of enzymes.—Dancyger, A. M., King, J. J., Quinlan, M. J., Fifield, H., Tucker, S., Saunders, H. L., Berru, M., Magor, B. G., Martin, A., Larijani, M. Differences in the enzymatic efficiency of human and bony fish AID are mediated by a single residue in the C terminus modulating single‐stranded DNA binding. FASEB J. 26, 1517‐1525 (2012). www.fasebj.org