Conflicting reports have suggested that the silent information regulator 2 (SIR2) protein family employs NAD(+) to ADP-ribosylate histones [Tanny, J. C., Dowd, G. J., Huang, J., Hilz, H. & Moazed, D. (1999) Cell 99, 735-745; Frye, R. A. (1999) Biochem. Biophys. Res. Commun. 260, 273-279], deacetylate histones [Landry, J., Sutton, A., Tafrov, S. T., Heller, R. C., Stebbins, J., Pillus, L. & Sternglanz, R. (2000) Proc. Natl. Acad. Sci. USA 97, 5807-5811; Smith, J. S., Brachmann, C. B., Celic, I., Kenna, M. A., Muhammad, S., Starai, V. J., Avalos, J. L., Escalante-Semerena, J. C., Grubmeyer, C., Wolberger, C. & Boeke, J. D. (2000) Proc. Natl. Acad. Sci. USA 97, 6658-6663], or both [Imai, S., Armstrong, C. M., Kaeberlein, M. & Guarente, L. (2000) Nature (London) 403, 795-800]. Uncovering the true enzymatic function of SIR2 is critical to the basic understanding of its cellular function. Therefore, we set out to authenticate the reaction products and to determine the intrinsic catalytic mechanism. We provide direct evidence that the efficient histone/protein deacetylase reaction is tightly coupled to the formation of a previously unidentified acetyl-ADP-ribose product (1-O-acetyl-ADP ribose). One molecule of NAD(+) and one molecule of acetyl-lysine are readily catalyzed to one molecule of deacetylated lysine, nicotinamide, and 1-O-acetyl-ADP-ribose. A unique reaction mechanism involving the attack of enzyme-bound acetate or the direct attack of acetyl-lysine on an oxocarbenium ADP-ribose intermediate is proposed. We suggest that the reported histone/protein ADP-ribosyltransferase activity is a low-efficiency side reaction that can be explained through the partial uncoupling of the intrinsic deacetylation and acetate transfer to ADP-ribose.