Dioxygenase that mediates demethylation of DNA and RNA containing 1-methyladenosine (m1A) (By similarity). Repairs alkylated DNA containing 1-methyladenosine (m1A) and 3-methylcytosine (m3C) by oxidative demethylation (PubMed:16174769). Has a strong preference for single-stranded DNA (PubMed:16174769). Able to process alkylated m3C within double-stranded regions via its interaction with ASCC3, which promotes DNA unwinding to generate single-stranded substrate needed for ALKBH3. Can repair exocyclic 3,N4-ethenocytosine adducs in single-stranded DNA. Also acts on RNA. Demethylates N(1)-methyladenosine (m1A) RNA, an epigenetic internal modification of messenger RNAs (mRNAs) highly enriched within 5'-untranslated regions (UTRs) and in the vicinity of start codons. Requires molecular oxygen, alpha-ketoglutarate and iron (By similarity). 2-oxoglutarate + an N(1)-methyladenosine in mRNA + O2 = an adenosine in mRNA + CO2 + formaldehyde + succinate 2-oxoglutarate + a methylated nucleobase within DNA + O2 = a nucleobase within DNA + CO2 + formaldehyde + succinate 2-oxoglutarate + an N(1)-methyl-2'-deoxyadenosine in single-stranded DNA + O2 = a 2'-deoxyadenosine in single-stranded DNA + CO2 + formaldehyde + H(+) + succinate 2-oxoglutarate + an N(3)-methyl-2'-deoxycytidine in single-stranded DNA + O2 = a 2'-deoxycytidine in single-stranded DNA + CO2 + formaldehyde + H(+) + succinate 2-oxoglutarate + a 3,N(4)-etheno-2'-deoxycytidine in single-stranded DNA + H2O + O2 = a 2'-deoxycytidine in single-stranded DNA + CO2 + glyoxal + succinate Binds 1 Fe(2+) ion per subunit. Activated by ascorbate. Interacts with the ASCC complex composed of ASCC1, ASCC2 and ASCC3. Interacts directly with ASCC3, and is thereby recruited to the ASCC complex. Interacts with OTUD4; the interaction is direct. Interacts with USP7 and USP9X. Colocalizes with ASCC2 and ASCC3 in nuclear foci when cells have been exposed to alkylating agents that cause DNA damage. Predominantly localizes to the nucleus. Detected in testis, kidney, liver and heart. Ubiquitinated; undergoes 'Lys-48'-linked polyubiquitination. OTUD4 promotes USP7 and USP9X-dependent deubiquitination of 'Lys-48'-polyubiquitinated ALKBH3 promoting the repair of alkylated DNA lesions. No visible phenotype. Belongs to the alkB family.