Pertussis toxin (islet-activating protein) activates adenylate cyclase in susceptible cells by ADP-ribosylating an inhibitory component of the cyclase system. This toxin, assayed in a cell-free system in the presence of high concentrations of thiol, catalyzed the hydrolysis of NAD to ADP-ribose and nicotinamide. This NAD glycohydrolase activity co-chromatographed on Sephacryl G-200 in 6.5 M urea, pH 3.2, 0.1 M glycine with the ADP-ribosyltransferase activity of the toxin, as monitored by the transfer of [32P]ADP-ribose from [32P]NAD to a 41,000-Da protein in NG108-15 neuroblastoma X glioma hybrid cells. In the absence of thiol, the native holotoxin was enzymatically inactive. Following addition of 250 mM dithiothreitol to the assay, maximal enzymatic activity was evident after a delay of approximately 1 h; with 20 mM thiol, the delay was longer. The Km for NAD with the fully activated enzyme was 25 microM; the Km did not appear to vary with the extent of activation. Thiol was necessary in a cell-free system to demonstrate NAD glycohydrolase activity. When extensively washed membranes were used as a source of 41,000-Da substrate, thiol was necessary to observe ADP-ribosylation in some cases (human erythrocytes) and significantly stimulated activity in others (NG108-15 cells). In contrast to the bacterial toxins choleragen and Escherichia coli heat-labile enterotoxin that ADP-ribosylate stimulatory components of the cyclase system, pertussis toxin did not transfer ADP-ribose to low molecular weight guanidino compounds, such as arginine or agmatine.