CD38 is a multifunctional enzyme involved in metabolizing two Ca(2+) messengers, cyclic ADP-ribose (cADPR) and nicotinic acid adenine dinucleotide phosphate (NAADP). When incubated with NAD, CD38 predominantly hydrolyzes it to ADP-ribose (NAD glycohydrolase), but a trace amount of cADPR is also produced through cyclization of the substrate. Site-directed mutagenesis was used to investigate the amino acid important for controlling the hydrolysis and cyclization reactions. CD38 and its mutants were produced in yeast, purified, and characterized by immunoblot. Glu-146 is a conserved residue present in the active site of CD38. Its replacement with Phe greatly enhanced the cyclization activity to a level similar to that of the NAD hydrolysis activity. A series of additional replacements was made at the Glu-146 position including Ala, Asn, Gly, Asp, and Leu. All the mutants exhibited enhanced cyclase activity to various degrees, whereas the hydrolysis activity was inhibited greatly. E146A showed the highest cyclase activity, which was more than 3-fold higher than its hydrolysis activity. All mutants also cyclized nicotinamide guanine dinucleotide to produce cyclic GDP. This activity was enhanced likewise, with E146A showing more than 9-fold higher activity than the wild type. In addition to NAD, CD38 also hydrolyzed cADPR effectively, and this activity was correspondingly depressed in the mutants. When all the mutants were considered, the two cyclase activities and the two hydrolase activities were correlated linearly. The Glu-146 replacements, however, only minimally affected the base-exchange activity that is responsible for synthesizing NAADP. Homology modeling was used to assess possible structural changes at the active site of E146A. These results are consistent with Glu-146 being crucial in controlling specifically and selectively the cyclase and hydrolase activities of CD38.