The nucleotide-sugar pyrophosphatase activity of rat small intestine was studied using GDP-[14C]Man as substrate. The highest specific activities in the gastrointestinal tract were in the proximal small intestine, with a preferential localization in villus tip cells. Purified brush-border membranes were highly enriched in nucleotide-sugar pyrophosphatase. After the enzyme was solubilized with detergent and purified 180-fold, it hydrolyzed FAD and p-nitrophenyl-5'-thymidylate, as well as nucleotide sugars. That the same enzyme, a 5'-nucleotide phosphodiesterase, is responsible for nucleotide-sugar pyrophosphatase, phosphodiesterase I, and FAD pyrophosphatase activities is indicated by: co-migration in electrophoresis, parallel thermal inactivation, competitive inhibition studies, and similar regional, cellular, and subcellular localizations.