Mammalian apolipoprotein B (apoB) C to U RNA editing is catalyzed by a multicomponent holoenzyme containing a single catalytic subunit, apobec-1. We have characterized an apobec-1 homologue, ARCD-1, located on chromosome 6p21.1, and determined its role in apoB mRNA editing. ARCD-1 mRNA is ubiquitously expressed; phylogenetic analysis reveals it to be a distant member of the RNA editing family. Recombinant ARCD-1 demonstrates cytidine deaminase and apoB RNA binding activity but does not catalyze C to U RNA editing, either in vitro or in vivo. Although not competent itself to mediate deamination of apoB mRNA, ARCD-1 inhibits apobec-1-mediated C to U RNA editing. ARCD-1 interacts and heterodimerizes with both apobec-1 and apobec-1 complementation factor (ACF) and localizes to both the nucleus and cytoplasm of transfected cells. Together, the data suggest that ARCD-1 is a novel cytidine deaminase that interacts with apobec-1 and ACF to inhibit apoB mRNA editing, possibly through interaction with other protein components of the apoB RNA editing holoenzyme.