Many bacterial toxins kill animal cells by adenosine diphosphate (ADP)-ribosylating intracellular target proteins. Mammalian cells express toxin-related cell surface ADP-ribosyltransferases (ARTs) that transfer ADP-ribose from nicotinamide adenine dinucleotide (NAD) onto arginine residues of other membrane proteins. The association of these glycosylphosphatidylinositol (GPI)-anchored ectoenzymes with glycolipid rafts focuses them onto components of the signal transduction machinery. Exposing murine T cells to NAD, the ART substrate, induces a cascade of reactions that culminates in cell death by apoptosis. This mechanism, dubbed 'NAD-induced cell death' or NICD, is initiated when ART2 ADP-ribosylates the cytolytic P2X7 purinergic receptor, inducing formation of a cation channel, opening of a nonselective pore, shedding of CD62L from the cell surface, exposure of phosphatidylserine on the outer leaflet of the plasma membrane, breakdown of the mitochondrial membrane potential, and DNA-fragmentation. The ART substrate NAD is produced in large amounts inside the cell and can be released from damaged cells during inflammation and tissue injury. In the extracellular environment, the signaling function of NAD is terminated by NAD-degrading ectoenzymes such as CD38. We propose that ART2-catalyzed ADP-ribosylation of P2X7 represents the paradigm of a regulatory mechanism by which ART-expressing cells can sense and respond to the release of NAD from damaged cells.