AID/APOBEC family cytosine deaminases canonically play crucial roles in immunity by converting cytosine to uracil in single-stranded DNA (ssDNA). Outside of this established physiological role, AID/APOBEC enzymes have also been implicated in the poorly-understood process of DNA demethylation through their proposed deamination of epigenetically-modified cytosine bases like 5-methylcytosine (mC) and 5-hydroxymethylcytosine (hmC). However, there has been no thorough biochemical characterization of AID/APOBEC activity on these substrates, or on the recently-discovered 5-formylcytosine (fC) and 5-carboxylcytosine (caC) to inform this proposed role. Here, we provide the first steady-state kinetic measurements of the most active family member–APOBEC3A(A3A)–against various natural and unnatural modified substrates using a novel, restriction enzyme-based deamination assay. We determined that A3A has poor activity against bulkier oxidized cytosines, such as hmC, fC, and caC, and therefore likely does not contribute substantially to active DNA demethylation via deamination of these bases. By contrast, A3A efficiently deaminates mC in a manner not fully explained by the steric discrimination observed with other AID/APOBEC family members. Because A3A exhibits enzymatic proficiency for C and mC but potently discriminates against ox-mCs in vitro, we hypothesized that we could leverage A3A’s biochemical properties to efficiently localize ox-mCs in the genome. We developed APOBEC-Coupled Epigenetic Sequencing (ACE-Seq) – a nondestructive alternative to bisulfite-based methods for base resolution localization of hmC. We first validated this A3A-based method on differentially-modified phage genomes to demonstrate efficient conversion of C/mC and protection of hmC on a genome scale. We next applied ACE-Seq to mouse embryonic stem cell DNA and found a striking correlation with published hmC data from bisulfite-based methods. We also sequenced sorted mouse glutamatergic neurons and, using >100-fold less, saw significant correlation with previously published TAB-Seq data from unsorted mouse cortex DNA. Finally, we demonstrate the applicability of nondestructive ACE-Seq to locus-specific analysis with longer (>1 kb) amplicons, which could permit clustering analyses on single reads from larger regions such as enhancers. Altogether, we propose ACE-Seq as a facile alternative to bisulfite-based hmC localization methods, especially for analyzing limiting DNA samples, such as those from small or transient cell populations.