Uracil is usually an inappropriate base in DNA, but it is also a normal intermediate during somatic hypermutation (SHM) and class switch recombination (CSR) in adaptive immunity. In addition, uracil is introduced into retroviral DNA by the host as part of a defence mechanism. The sources of uracil in DNA are spontaneous or enzymatic deamination of cytosine (U:G mispairs) and incorporation of dUTP (U:A pairs). Uracil in DNA is removed by a uracil-DNA glycosylase. The major ones are nuclear UNG2 and mitochondrial UNG1 encoded by the UNG-gene, and SMUG1 that also removes oxidized pyrimidines, e.g. 5-hydroxymethyluracil. The other ones are TDG that removes U and T from mismatches, and MBD4 that removes U from CpG contexts. UNG2 is found in replication foci during the S-phase and has a distinct role in repair of U:A pairs, but it is also important in U:G repair, a function shared with SMUG1. SHM is initiated by activation-induced cytosine deaminase (AID), followed by removal of U by UNG2. Humans lacking UNG2 suffer from recurrent infections and lymphoid hyperplasia, and have skewed SHM and defective CSR, resulting in elevated IgM and strongly reduced IgG, IgA and IgE. UNG-defective mice also develop B-cell lymphoma late in life. In the defence against retrovirus, e.g. HIV-1, high concentrations of dUTP in the target cells promotes misincorporation of dUMP-, and host cell APOBEC proteins may promote deamination of cytosine in the viral DNA. This facilitates degradation of viral DNA by UNG2 and AP-endonuclease. However, viral proteins Vif and Vpr counteract this defense by mechanisms that are now being revealed. In conclusion, uracil in DNA is both a mutagenic burden and a tool to modify DNA for diversity or degradation.