An arsenal of effector proteins is injected by bacterial pathogens into the host cell or its vicinity to increase virulence. The commonly used top-down approaches inferring the toxic mechanism of individual effector proteins from the host's phenotype are often impeded by multiple targets of different effectors as well as by their pleiotropic effects. Here we describe our bottom-up approach, showing that the bacterial type III effector AvrRxo1 of plant pathogens is an authentic phosphotransferase that produces two novel metabolites by phosphorylating nicotinamide/nicotinic acid adenine dinucleotide at the adenosine 3′-hydroxyl group. Both products of AvrRxo1, 3′-NADP and 3′-nicotinic acid adenine dinucleotide phosphate (3′-NAADP), are substantially different from the ubiquitous co-enzyme 2′-NADP and the calcium mobilizer 2′-NAADP. Interestingly, 3′-NADP and 3′-NAADP have previously been used as inhibitors or signaling molecules but were regarded as “artificial” compounds so far. Our findings now necessitate a shift in thinking about the biological importance of 3′-phosphorylated NAD derivatives.