Human APOBEC3G (hA3G) is a member of the APOBEC-1 related protein (ARP) family of cytidine deaminases. hA3G functions as a natural defense against endogenous retrotransposons and a multitude of retroviruses, most notably human immunodeficiency virus type 1 (HIV-1). Nothing is known about the cellular function of hA3G, however, upon HIV-1 infection hA3G functions as an antiviral factor by mutating viral single-stranded DNA during reverse transcription. Whereas homologous deaminases such as APOBEC-1 and AID act on RNA and DNA, respectively, in the cell nucleus, hA3G mutagenic activity appears to be restricted to the cytoplasm. We demonstrate that hA3G is not a nucleo-cytoplasmic shuttling protein like APOBEC-1 and AID, but is strongly retained in the cytoplasm through a mechanism that involves both the N and C-terminal regions of the protein.