All retroviruses, including HIV-1, display species-specific patterns of infection. The impaired growth of these retroviruses in foreign and sometimes even in their natural hosts often stems from the action of potent host-encoded “viral restriction factors” that form important protective components of the innate immune system. The discovery of APOBEC3G and related cytidine deaminases as one class of host restriction factors and of the action of HIV-1 Vif as a specific APOBEC3G antagonist have stimulated intense scientific interest. This Vif-APOBEC3G axis now forms a very attractive target for development of an entirely new class of anti-HIV drugs. In this review, we summarize current understanding of the mechanism of action of the APOBEC3 family of enzymes, their intriguing regulation within cells, the impact of these enzymes on viral evolution and disease progression, and their roles in controlling not only the replication of exogenous retroviruses but also the retrotransposition of endogenous retroelements.