Highly purified, polymyxin-released, low molecular weight Escherichia coli heat-labile enterotoxin (LT) catalyzed the hydrolysis of NAD to ADP-ribose and nicotinamide. This NAD glycohydrolase activity was stimulated by dithiothreitol and was independent of cellular components. Nicotinamide formation was enhanced by arginine methyl ester > d-arginine congruent with l-arginine congruent with guanidine. A 20-fold increase in activity was noted with arginine methyl ester, and maximal activity again required dithiothreitol. When the reaction was initiated with toxin, a delay was observed before a constant rate was established. The reaction products found after incubation of [adenine-U-(14)C]NAD and l-[(3)H]arginine or unlabeled arginine methyl ester with the enterotoxin had mobilities on thin-layer chromatograms similar to the reaction products obtained after incubation of choleragen with these substrates and are consistent with the formation of ADP-ribose-l-arginine and ADP-ribose-l-arginine methyl ester, respectively. Both toxins, which catalyze the NAD-dependent activation of adenylate cyclase, thus appear to possess NAD glycohydrolase and ADP-ribosyltransferase activities. Although the activities of both toxins are dependent on dithiothreitol, Escherichia coli enterotoxin exhibited optimal activity in Tris (Cl(-)) (pH 7.5) and was inhibited by high concentrations of potassium phosphate (pH 7.0) or low pH (sodium acetate, pH 6.2). It appears that the optimal assay conditions as well as the kinetic constants for the reactants differ from those previously noted with choleragen. It is probable therefore that although the two toxins catalyze similar reactions, they differ in primary structure. The presence of transferase and glycohydrolase activities in structurally distinct toxins that activate adenylate cyclase strengthens our hypothesis that the ADP-ribosylation of arginine is a model for the NAD-dependent activation of adenylate cyclase; activation may result from ADP-ribosylation of the cyclase itself or of a protein that regulates its activity.