The Toxoplasma gondii nucleoside triphosphate hydrolase is the most active E-type ATPase yet identified, and was the first member of this new gene family to be cloned (Bermudes D, Peck KR, Afifi-Afifi M, Beckers CJM, Joiner KA. J Biol Chem 1994;269:29252-29260. Previous work also identified two isoforms of the enzyme in the virulent RH strain, and demonstrated that internal fragments of the genes encoding these isoforms were found differentially in virulent versus avirulent organisms (Asai T, Miura S, Sibley D, Okabayashi H, Tsutomu T, J Biol Chem 1995;270:11391-11397). We now show that the NTPase 1 isoform is expressed in avirulent strains, whereas virulent strains express both the NTPase 1 and NTPase 3 isoforms. The avirulent PLK strain lacks the gene for NTPase 3, explaining the absence of expression. Despite the fact that NTPase 1 and NTPase 3 are 97% identical at the amino acid level, recombinant NTPase 1 is a true apyrase, whereas recombinant NTPase 3 cleaves predominantly nucleotide triphosphates. Furthermore, native and recombinant NTPase 3 but neither native nor recombinant NTPase 1 bind to ATP-agarose, further distinguishing the two isoforms. Using chimeras between the NTP1 and NTP3 genes, we show that a block of twelve residues at the C-terminus dictates substrate specificity. These residues lie outside the regions conserved among other E-ATPases, and therefore provide new insight into substrate recognition by this class of enzymes.