Cancer-initiating translocations such as those associated with lymphomas require the formation of paired DNA double-strand breaks (DSBs). Activation-induced cytidine deaminase (AID) produces widespread somatic mutation in mature B cells; however, the extent of "off-target" DSB formation and its role in translocation-associated malignancy is unknown. Here, we show that deregulated expression of AID causes widespread genome instability, which alone is insufficient to induce B cell lymphoma; transformation requires concomitant loss of the tumor suppressor p53. Mature B cell lymphomas arising as a result of deregulated AID expression are phenotypically diverse and harbor clonal reciprocal translocations involving a group of Immunoglobulin (Ig) and non-Ig genes that are direct targets of AID. This group includes miR-142, a previously unknown micro-RNA target that is translocated in human B cell malignancy. We conclude that AID produces DSBs throughout the genome, which can lead to lymphoma-associated chromosome translocations in mature B cells.