The YOR163w open reading frame on chromosome XV of the Saccharomyces cerevisiae genome encodes a member of the MutT motif (nudix hydrolase) family of enzymes of Mr 21,443. By cloning and expressing this gene in Escherichia coli and S. cerevisiae, we have shown the product to be a (di)adenosine polyphosphate hydrolase with a previously undescribed substrate specificity. Diadenosine 5',5"'-P1, P6-hexaphosphate is the preferred substrate, and hydrolysis in H218O shows that ADP and adenosine 5'-tetraphosphate are produced by attack at Pbeta and AMP and adenosine 5'-pentaphosphate are produced by attack at Palpha with a Km of 56 microM and kcat of 0.4 s-1. Diadenosine 5',5"'-P1,P5-pentaphosphate, adenosine 5'-pentaphosphate, and adenosine 5'-tetraphosphate are also substrates, but not diadenosine 5',5"'-P1,P4-tetraphosphate or other dinucleotides, mononucleotides, nucleotide sugars, or nucleotide alcohols. The enzyme, which was shown to be expressed in log phase yeast cells by immunoblotting, displays optimal activity at pH 6.9, 50 degrees C, and 4-10 mM Mg2+ (or 200 microM Mn2+). It has an absolute requirement for a reducing agent, such as dithiothreitol (1 mM), and is inhibited by Ca2+ with an IC50 of 3.3 mM and F- (noncompetitively) with a Ki of 80 microM. Its function may be to eliminate potentially toxic dinucleoside polyphosphates during sporulation.