Catalyzes the hydrolytic deamination of adenosine to inosine in double-stranded RNA (dsRNA) referred to as A-to-I RNA editing. This may affect gene expression and function in a number of ways that include mRNA translation by changing codons and hence the amino acid sequence of proteins since the translational machinery read the inosine as a guanosine; pre-mRNA splicing by altering splice site recognition sequences; RNA stability by changing sequences involved in nuclease recognition; genetic stability in the case of RNA virus genomes by changing sequences during viral RNA replication; and RNA structure-dependent activities such as microRNA production or targeting or protein-RNA interactions. Can edit both viral and cellular RNAs and can edit RNAs at multiple sites (hyper-editing) or at specific sites (site-specific editing). Its cellular RNA substrates include: bladder cancer-associated protein (BLCAP), neurotransmitter receptors for glutamate (GRIA2) and serotonin (HTR2C) and GABA receptor (GABRA3). Site-specific RNA editing of transcripts encoding these proteins results in amino acid substitutions which consequently alters their functional activities. Exhibits low-level editing at the GRIA2 Q/R site, but edits efficiently at the R/G site and HOTSPOT1. Does not affect polyomavirus replication but provides protection against virus-induced cytopathic effects. Essential for embryonic development and cell survival and plays a critical role in the maintenance of hematopoietic stem cells. adenosine in double-stranded RNA + H(+) + H2O = inosine in double-stranded RNA + NH4(+) Homodimer. Homodimerization is essential for its catalytic activity (PubMed:12618436). Isoform 5 can form heterodimers with ADARB1/ADAR2. Isoform 1 and isoform 5 (via DRBM 3 domain) interact with TNPO1. Isoform 5 (via DRBM domains) interacts with XPO5. Isoform 1 and isoform 5 can interact with UPF1 (By similarity). Isoform 1 interacts with ILF2/NF45 and ILF3/NF90 (PubMed:16055709). Binding to ILF3/NF90 up-regulates ILF3-mediated gene expression. Isoform 1 and isoform 5 interact with EIF2AK2/PKR (PubMed:17079286). Long forms starting at Met-1 are found predominantly in cytoplasm. Shuttles between the cytoplasm and nucleus. Long forms starting at Met-1 are found predominantly in cytoplasm. Short forms starting at Met-519 are found exclusively in the nucleolus. Short forms starting at Met-519 are found exclusively in the nucleolus. Highest levels in brain and spleen. Lowest levels in liver. By inflammation. Under normal conditions, long forms starting at Met-1 are dominant. Inflammation causes selective induction of short forms starting at Met-519. The third dsRNA-binding domain (DRBM 3) contains an additional N-terminal alpha-helix that is part of a bi-partite nuclear localization signal, together with the sequence immediately C-terminal to DRBM 3. The presence of DRBM 3 is important to bring together the N-terminal and the C-terminal part of the bi-partite nuclear localization signal for import mediated by TNPO1. RNA binding interferes with nuclear import. The first Z-binding domain binds Z-DNA. Sumoylation reduces RNA-editing activity. Mice do not survive past 11.0-12.5 dpc, and embryos display widespread apoptosis, a rapidly disintegrating liver structure and severe defects in hematopoiesis.