CD38 is a bifunctional ectoenzyme predominantly expressed on hematopoietic cells where its expression correlates with differentiation and proliferation. The two enzyme activities displayed by CD38 are an ADP-ribosyl cyclase and a cyclic adenosine diphosphate ribose (cADPR) hydrolase that catalyzes the synthesis and hydrolysis of cADPR. T lymphocytes can be induced to express CD38 when activated with antibodies against specific antigen receptors. If the activated T cells are then exposed with NAD, cell death by apoptosis occurs. During the exposure of activated T cells to NAD, the CD38 is modified by ecto-mono-ADP-ribosyltransferases (ecto-mono-ADPRTs) specific for cysteine and arginine residues. Arginine-ADP-ribosylation results in inactivation of both cyclase and hydrolase activities of CD38, whereas cysteine-ADP-ribosylation results only in the inhibition of the hydrolase activity. The arginine-ADP-ribosylation causes a decrease in intracellular cADPR and a subsequent decrease in Ca(2+) influx, resulting in apoptosis of the activated T cells. Our results suggest that the interaction of two classes of ecto-ADP-ribose transfer enzymes plays an important role in immune regulation by the selective induction of apoptosis in activated T cells and that cADPR mediated signaling is essential for the survival of activated T cells.