DNA methylation is a well‐characterized epigenetic landmark involved in transcriptional regulation; however, mechanisms underlying its regulation remain poorly characterized. Recent studies demonstrate that activation‐induced cytidine deaminase (AID) is involved in active DNA demethylation. AID is aberrantly expressed in inflammation‐associated cancers and generates point mutations; however, cellular disorders attributed to its demethylation function are largely unexplored. Here we demonstrate that ectopic AID expression perturbs tumor‐related gene expression. AID (with Gadd45) activated a methylated paired box gene 5 (Pax5) reporter construct, and induced expression and association of endogenous Pax5 with the AID promoter, suggesting that aberrant AID expression triggers an auto‐activation circuit to consolidate self‐expression.