DNA glycosylases UNG and SMUG1 excise uracil from DNA and belong to the same protein superfamily. Vertebrates contain both SMUG1 and UNG, but their distinct roles in base excision repair (BER) of deaminated cytosine (U:G) are still not fully defined. Here we have examined the ability of human SMUG1 and UNG2 (nuclear UNG) to initiate and coordinate repair of U:G mismatches. When expressed in Escherichia coli cells, human UNG2 initiates complete repair of deaminated cytosine, while SMUG1 inhibits cell proliferation. In vitro, we show that SMUG1 binds tightly to AP-sites and inhibits AP-site cleavage by AP-endonucleases. Furthermore, a specific motif important for the AP-site product binding has been identified. Mutations in this motif increase catalytic turnover due to reduced product binding. In contrast, the highly efficient UNG2 lacks product-binding capacity and stimulates AP-site cleavage by APE1, facilitating the two first steps in BER. In summary, this work reveals that SMUG1 and UNG2 coordinate the initial steps of BER by distinct mechanisms. UNG2 is apparently adapted to rapid and highly coordinated repair of uracil (U:G and U:A) in replicating DNA, while the less efficient SMUG1 may be more important in repair of deaminated cytosine (U:G) in non-replicating chromatin.