Activation-induced cytidine deaminase (AID) is an enzyme required for antibody diversification, and it causes DNA mutations and strand breaks. Constitutive AID expression in mice invariably caused lung lesions morphologically similar to human atypical adenomatous hyperplasia (AAH), which can be a precursor of bronchioloalveolar carcinoma. Similar to AAH, mouse AAH-like lesion (MALL) exhibited signs of alveolar differentiation, judging from the expression of alveolar type II (AT2) cell marker surfactant protein C (SP-C). However, electron microscopy indicated that MALL, which possessed certain features of a mucous cell, is distinct from an AAH or AT2 cell. Although MALL developed in all individuals within 30 weeks after birth, lung tumors occurred in only 10%; this suggests that the vast majority of MALLs fail to grow into visible tumors. MALL expressed several recently described markers of lung alveolar regeneration such as p63, keratin 5, keratin 14, leucine-rich repeat containing G protein-coupled receptor 5 (Lgr5), and Lgr6. Increased cell death was observed in the lungs of AID transgenic mice compared with wild-type mice. Based on these observations, we speculate that MALL is a regenerating tissue compensating for cellular loss caused by AID cytotoxicity. AID expression in such regenerating tissue should predispose cells to malignant transformation via its mutagenic activity.