The activation-induced cytidine deaminase (AID; also known as AICDA) enzyme is required for somatic hypermutation and class switch recombination at the immunoglobulin locus. In germinal-centre B cells, AID is highly expressed, and has an inherent mutator activity that helps generate antibody diversity. However, AID may also regulate gene expression epigenetically by directly deaminating 5-methylcytosine in concert with base-excision repair to exchange cytosine. This pathway promotes gene demethylation, thereby removing epigenetic memory. For example, AID promotes active demethylation of the genome in primordial germ cells. However, different studies have suggested either a requirement or a lack of function for AID in promoting pluripotency in somatic nuclei after fusion with embryonic stem cells. Here we tested directly whether AID regulates epigenetic memory by comparing the relative ability of cells lacking AID to reprogram from a differentiated murine cell type to an induced pluripotent stem cell. We show that Aid-null cells are transiently hyper-responsive to the reprogramming process. Although they initiate expression of pluripotency genes, they fail to stabilize in the pluripotent state. The genome of Aid-null cells remains hypermethylated in reprogramming cells, and hypermethylated genes associated with pluripotency fail to be stably upregulated, including many MYC target genes. Recent studies identified a late step of reprogramming associated with methylation status, and implicated a secondary set of pluripotency network components. AID regulates this late step, removing epigenetic memory to stabilize the pluripotent state.