Pseudomonas aeruginosa exotoxin' A (ETA) catalyzes the transfer of the ADP-ribose moiety from NAD+ to its target protein, eukaryotic elongation factor 2 (eEF2). The objective of this research was to improve the understanding of the mechanism of interaction between of the catalytic domain of ETA (ETA'c') and its substrates NAD+ and eEF2. Three loops, Aaron loop (AL), Loop 1 (L1) and Loop 3 (L3) within ETA'c' were characterized. It was shown that ETA'c' interacts with eEF2 through shape recognition rather than single interfacial residue interactions. AL functions in stabilizing the key residue, Tyr-481, indirectly. L1 plays a role in holding/positioning the adenine ring of NAD+ and facilitates transfer of the ADP-ribose moiety. L3 partly closes in on the ETA active site to expel solvent and helps stabilize the oxacarbenium ion during transition-state formation. The counterparts of L1 and L3 in diphtheria toxin were also studied for comparison.