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Insertions and deletions (indels) are low-frequency deleterious genomic DNA alterations. Despite their rarity, indels are common, and insertions leading to long complementarity-determining region 3 (CDR3) are vital for antigen-binding functions in broadly neutralizing and polyreactive antibodies targeting viruses. Because of challenges in detecting indels, the mechanism that generates indels during immunoglobulin diversification processes remains poorly understood. We carried out ultra-deep profiling of indels and systematically dissected the underlying mechanisms using passenger-immunoglobulin mouse models. We found that activation-induced cytidine deaminase–dependent ±1–base pair (bp) indels are the most prevalent indel events, biasing deleterious outcomes, whereas longer in-frame indels, especially insertions that can extend the CDR3 length, are rare outcomes. The ±1-bp indels are channeled by base excision repair, but longer indels require additional DNA-processing factors. Ectopic expression of a DNA exonuclease or perturbation of the balance of DNA polymerases can increase the frequency of longer indels, thus paving the way for models that can generate antibodies with long CDR3. Our study reveals the mechanisms that generate beneficial and deleterious indels during the process of antibody somatic hypermutation and has implications in understanding the detrimental genomic alterations in various conditions, including tumorigenesis. Immunoglobulin indel insights: Insertions and deletions (indels) are genomic DNA alterations that are critical to the emergence of a long complementarity determining region 3 (CDR3), which is a key step during immunoglobulin diversification. Indels have been notoriously difficult to detect, thus making it difficult to define mechanisms involved in this process. Hao et al. developed passenger-immunoglobulin mouse models to carry out ultra-deep profiling of indels. They observed that activation-induced cytidine deaminase (AID)–dependent ±1 bp indel events were the most common and involved base excision repair. In contrast, longer in-frame indels, such as those associated with CDR3 lengthening, were rare and required other DNA processing molecules. They were also able to increase indel frequencies through ectopic expression of a DNA exonuclease or changes in the balance of DNA polymerases, thus suggesting a method for generating antibodies with enhanced neutralization. —CNF [ABSTRACT FROM AUTHOR]