Nicotinamidases catalyze the hydrolysis of nicotinamide to nicotinic acid and ammonia. Nicotinamidases are absent in mammals but function in NAD+ salvage in many bacteria, yeast, plants, protozoa, and metazoans. We have performed structural and kinetic investigations of the nicotinamidase from S. cerevisiae (Pnc1). Steady-state product inhibitor analysis revealed an irreversible reaction where ammonia is the first product released, followed by nicotinic acid. A series of nicotinamide analogs acting as inhibitors or substrates were examined revealing that the nicotinamide carbonyl oxygen and ring nitrogen are critical for binding and reactivity. X-ray structural analysis revealed a covalent adduct between nicotinaldehyde and Cys167 of Pnc1 and coordination of the nicotinamide ring nitrogen to the active-site zinc ion. Using this structure as a guide, the function of several residues was probed via mutagenesis and primary 15N and 13C kinetic isotope effects (KIE) on V/K for amide bond hydrolysis. The KIE values of almost all variants were increased indicating that C-N bond cleavage is at least partially rate limiting; however, a decreased KIE for D51N was observed indicative of a higher commitment to catalysis. In addition, KIE values using slower alternate substrates indicated that C-N bond cleavage is at least partially rate limiting with nicotinamide to highly rate limiting with thionicotinamide. A detailed mechanism is discussed involving nucleophilic attack of Cys167, followed by elimination of ammonia and then hydrolysis to liberate nicotinic acid. These results will aid design of mechanism-based inhibitors to target pathogens that rely on nicotinamidase activity.