NAADP (nicotinic acid-adenine dinucleotide phosphate), the most potent Ca2+-mobilizing second messenger, is active in a wide range of organisms and cell types. Until now, all NAADP-producing enzymes have been thought to be members of the ADP-ribosyl cyclase family. ADP-ribosyl cyclases exhibit promiscuous substrate selectivity, synthesize a variety of products and are regulated in a limited manner, which may be non-physiological. In the present paper, we report the presence of an enzyme on the surface of sea urchin sperm that exhibits bell-shaped regulation by Ca2+ over a range (EC(50) of 10 nM and IC(50) of 50 microM) that is physiologically relevant. Uniquely, this surface enzyme possesses complete selectivity for nucleotides with a 2'-phosphate group and exhibits only base-exchange activity without any detectable cyclase activity. Taken together, these findings indicate that this novel enzyme should be considered as the first true NAADP synthase.