Previous studies have suggested that tyrosine-65 (Tyr-65) of diphtheria toxin (DT) is located at the active site. To investigate the role of Tyr-65 in NAD binding and the ADP-ribosylation of elongation factor-2 (EF-2), we changed this residue to alanine and phenylalanine by site-directed mutagenesis of a synthetic gene encoding the catalytic fragment of DT (DTA). The alanine mutant was greatly diminished in ADP-ribosylation activity (350-fold) and NAD-glycohydrolase activity (88-fold), whereas the phenylalanine mutant was reduced in these activities only slightly. Dissociation constants (Kd) for NAD binding were 15 microM for wild-type DTA, 26 microM for the phenylalanine mutant, and greater than 800 microM NAD for the alanine mutant. However, both mutant enzymes were found to bind adenosine with nearly equal affinity as wild-type DTA. These results support a model of ADP-ribosylation in which the phenolic ring of Tyr-65 interacts with the nicotinamide ring of NAD, orienting the N-glycosidic bond of NAD for attack by the incoming nucleophile in a direct displacement mechanism.