RNA editing, the post-transcriptional alteration of a gene-encoded sequence, is a widespread phenomenon in eukaryotes. As a consequence of RNA editing, functionally distinct proteins can be produced from a single gene. The molecular mechanisms involved include single or multiple base insertions or deletions as well as base substitutions. In mammals, one type of substitutional RNA editing, characterized by site-specific base-modification, was shown to modulate important physiological processes. The underlying reaction mechanism of substitutional RNA editing involves hydrolytic deamination of cytosine or adenosine bases to uracil or inosine, respectively. Protein factors have been characterized that are able to induce RNA editing in vitro. A supergene family of RNA-dependent deaminases has emerged with the recent addition of adenosine deaminases specific for tRNA. Here we review the developments that have substantially increased our understanding of base-modification RNA editing over the past few years, with an emphasis on mechanistic differences, evolutionary aspects and the first insights into the regulation of editing activity.