Calorie restriction (CR) extends life span in a wide variety of species. Previously, we showed that calorie restriction increases the replicative life span in yeast by activating Sir2, a highly conserved NAD-dependent deacetylase. Here we test whether CR activates Sir2 by increasing the NAD/NADH ratio or by regulating the level of nicotinamide, a known inhibitor of Sir2. We show that CR decreases NADH levels, and that NADH is a competitive inhibitor of Sir2. A genetic intervention that specifically decreases NADH levels increases life span, validating the model that NADH regulates yeast longevity in response to CR.