Cyclic ADP-ribose (cADPR) is a universal calcium messenger molecule that regulates many physiological processes. The production and degradation of cADPR are catalyzed by a family of related enzymes, including the ADP-ribosyl cyclase from Aplysia california (ADPRAC) and CD38 from human. Although ADPRC and CD38 share a common evolutionary ancestor, their enzymatic functions toward NAD and cADPR homeostasis have evolved divergently. Thus, ADPRC can only generate cADPR from NAD (cyclase), whereas CD38, in contrast, has multiple activities, i.e. in cADPR production and degradation, as well as NAD hydrolysis (NADase). In this study, we determined a number of ADPRC and CD38 structures bound with various nucleotides. From these complexes, we elucidated the structural features required for the cyclization (cyclase) reaction of ADPRC and the NADase reaction of CD38. Using the structural approach in combination with site-directed mutagenesis, we identified Phe-174 in ADPRC as a critical residue in directing the folding of the substrate during the cyclization reaction. Thus, a point mutation of Phe-174 to glycine can turn ADPRC from a cyclase toward an NADase. The equivalent residue in CD38, Thr-221, is shown to disfavor the cyclizing folding of the substrate, resulting in NADase being the dominant activity. The comprehensive structural comparison of CD38 and APDRC presented in this study thus provides insights into the structural determinants for the functional evolution from a cyclase to a hydrolase.