Secondary diversification of antibodies through somatic hypermutation (SHM) and class switch recombination (CSR) is a critical component of the immune response. Activation-induced deaminase (AID) initiates both processes by deaminating cytosine residues in immunoglobulin genes. The resulting U:G mismatch can be processed by alternative pathways to give rise to a mutation (SHM) or a DNA double-strand break (CSR). Central to this processing is the activity of uracil-N-glycosylase (UNG), an enzyme normally involved in error-free base excision repair. We used next generation sequencing to analyze the contribution of UNG to the resolution of AID-induced lesions. Loss- and gain-of-function experiments showed that UNG activity can promote both error-prone and high fidelity repair of U:G lesions. Unexpectedly, the balance between these alternative outcomes was influenced by the sequence context of the deaminated cytosine, with individual hotspots exhibiting higher susceptibility to UNG-triggered error-free or error-prone resolution. These results reveal UNG as a new molecular layer that shapes the specificity of AID-induced mutations and may provide new insights into the role of AID in cancer development.