The hydrolysis of NAD by rat intestine was studied to determine the subcellular site of this hydrolysis and to identify the niacin-containing products that are formed. Using [nicotinamide-14C]NAD as substrate, and high pressure liquid chromatography for identification and quantification of products, the present study demonstrates two independent reactions for the hydrolysis of NAD; one that forms nicotinamide through hydrolysis of the ribosyl-pyridinium bond and one that forms nicotinamide mononucleotide through the hydrolysis of the pyrophosphate bond. The nicotinamide mononucleotide is subsequently dephosphorylated to nicotinamide riboside. Enzymes which release nicotinamide mononucleotide and nicotinamide riboside are associated with the brush border membrane as determined by analysis of fractionated intestinal homogenates. The enzyme activity which releases nicotinamide from NAD is associated with the brush border membrane fraction and also with a second cellular particulate fraction. Between pH5 and pH6 NAD is hydrolysed principally to nicotinamide. At pH 7.0 rates of nicotinamide and nicotinamide mononucleotide formation are the same. Above pH 7.0 the formation of nicotinamide mononucleotide is preferred.