APOBEC3s proteins (A3s), a family of human cytidine deaminases, protect the host from endogenous retro-elements and exogenous viral infections by introducing hypermutations. However, overexpressed A3s can modify genomic DNA to promote tumorigenesis, especially A3B. Despite overall similarity, A3 proteins have distinct deamination activity. Recently determined A3 structures have revealed the molecular determinants of nucleotide specificity and DNA binding. However, for A3B, the structural basis for regulation of deamination activity and the role of active site loops in coordinating DNA had remained unknown. Using advanced molecular modeling followed by experimental mutational analysis and dynamics simulations, we investigated molecular mechanism of DNA binding by A3B-CTD. We modeled fully native A3B-DNA structure, identified Arg211 in loop 1 as the gatekeeper coordinating DNA and critical residues for nucleotide specificity. We also identified a unique auto-inhibited conformation in A3B-CTD that restricts access and binding of DNA to the active site. Our results reveal the structural basis for DNA binding and relatively lower catalytic activity of A3B and provide opportunities for rational design of specific inhibitors to benefit cancer therapeutics.