Estrogen receptor α (ERα) is the key transcriptional driver in a large proportion of breast cancers. We report that APOBEC3B (A3B) is required for regulation of gene expression by ER and acts by causing C-to-U deamination at ER binding regions. We show that these C-to-U changes lead to the generation of DNA strand breaks through activation of base excision repair (BER) and to repair by non-homologous end-joining (NHEJ) pathways. We provide evidence that transient cytidine deamination by A3B aids chromatin modification and remodelling at the regulatory regions of ER target genes that promotes their expression. A3B expression is associated with poor patient survival in ER+ breast cancer, reinforcing the physiological significance of A3B for ER action.