Post-transcriptional editing of apolipoprotein B (apoB) mRNA is regulated in hepatic cells to achieve a steady state proportion of edited and unedited RNA molecules. This activity is catalyzed by APOBEC-1 (apoB mRNA editing catalytic subunit 1) in what has been widely accepted as nuclear event occurring during or after mRNA splicing. Introns impair the efficiency of editing within an adjacent exon in a distance-dependent manner in reporter RNAs. We show here that this inhibition can be overcome by overexpressing APOBEC-1 and that the enhanced editing efficiency on these reporter RNAs occurred after splicing on cytoplasmic transcripts. Given the absolute requirement of auxiliary proteins in apoB mRNA editing, the data suggested that auxiliary proteins were distributed with APOBEC-1 in both the nucleus and cytoplasm of McArdle cells. In fact, immunolocalization of one such auxiliary protein, APOBEC-1 complementation factor (ACF) demonstrated a nuclear and cytoplasmic distribution. We also demonstrate that in the absence of alterations in APOBEC-1 expression, changes in edited apoB RNA induced by ethanol arise through the stimulation of nuclear editing activity. The finding that apoB mRNA editing can occur in the cytoplasm but normally does not suggests that under biological conditions, restricting editing activity to the nucleus must be an important step in regulating the proportion of the edited apoB mRNAs.