Abstract: APOBEC enzymes are part of the innate immunity and are responsible for restricting viruses and retroelements by deaminating cytosine residues. Most solid tumors harbor different levels of somatic mutations attributed to the off-target activities of APOBEC3A (A3A) and/or APOBEC3B (A3B). However, how APOBEC3A/B interact with exogenous mutagenic processes in shaping tumor development is largely unknown. Here, by combining deep whole-genome sequencing with multi-omics profiling of 309 lung cancers from smokers with detailed tobacco smoking information, we identify two subtypes defined by low (LAS) and high (HAS) APOBEC mutagenesis. LAS are enriched for A3B-like mutagenesis and KRAS mutations, whereas HAS for A3A-like mutagenesis and TP53 mutations. Unlike APOBEC3A, APOBEC3B expression is strongly associated with an upregulation of the base excision repair pathway. Hypermutation by unrepaired A3A and tobacco smoking mutagenesis combined with TP53-induced genomic instability can trigger senescence, apoptosis, and cell regeneration, as indicated by telomere shortening, high expression of pulmonary healing signaling pathway and stemness markers in HAS. The expected association of tobacco smoking exposure with genomic/epigenomic changes are not observed in HAS, a plausible consequence of frequent cell senescence or apoptosis. HAS tumors have slower clonal expansion and older age at onset compared to LAS, particularly in heavy smokers, consistent with high proportions of newly generated, unmutated cells in HAS. These findings show how heterogeneity in mutational burden across competing mutational processes and cell types contributes to tumor development, with important clinical implications.