Immunoglobulin (Ig) isotype switching is a recombination event that changes the constant domain of antibody genes and is catalyzed by activation-induced cytidine deaminase (AID). Upon recruitment to Ig genes, AID deaminates cytidines at switch (S) recombination sites, leading to the formation of DNA breaks. In addition to their role in isotype switching, AID-induced lesions promote Igh-cMyc chromosomal translocations and tumor development. However, cMyc translocations are also present in lymphocytes from healthy humans and mice, and thus, it remains unclear whether AID directly contributes to the dynamics of B cell transformation. Using a plasmacytoma mouse model, we show that AID^+/− mice have reduced AID expression levels and display haploinsufficiency both in the context of isotype switching and plasmacytomagenesis. At the Ig loci, AID^+/− lymphocytes show impaired intra- and inter-switch recombination, and a substantial decrease in the frequency of S mutations and chromosomal breaks. In AID^+/− mice, these defects correlate with a marked decrease in the accumulation of B cell clones carrying Igh-cMyc translocations during tumor latency. These results thus provide a causality link between the extent of AID enzymatic activity, the number of emerging Igh-cMyc–translocated cells, and the incidence of B cell transformation.