The rabbit erythrocyte possesses an active DPN-ase which is firmly attached to the membrane of the cell. Evidently, the enzyme is oriented in the membrane in such a way as to be able to act upon DPN added to the external medium. The enzyme splits DPN at the bond linking the quaternary nitrogen of the nicotinamide moiety with the ribose component. Despite the release of an H+ion during hydrolysis of DPN, the activity of the enzyme remains practically constant over the pH range from 4.5 to 10.0. DPN-ase also splits nicotinamide from TPN, but its affinity for the latter is only about one third of that for DPN. Nicotinamide, adenine, and the substituted purine derivatives theobromine, theophylline, and xanthine inhibit DPN-ase, while compounds such as ribose, adenylic acid, caffeine, and nembutal are without effect in this respect. Of all the substances tested theobromine proved to be the most powerful inhibitor. The mode of enzyme–substrate attachment and the possible involvement of DPN-ase in ion transport are discussed in the light of these findings.