SARM1 protein plays a central role in axonal degeneration, a key process in many neurodegenerative diseases and nerve injuries. It mediates this by depleting axonal NAD+ through its NADase activity, catalyzed by the TIR domain. Normally, this activity is kept in an inactive state and becomes activated in response to various neuronal damage signals. However, the molecular mechanism behind SARM1 activation, particularly how activation is restricted to damaged axons, remains to be fully elucidated. In this study, using a class of pyridine-containing compounds that induce SARM1-dependent cell death and axonal degeneration, we reveal a two-step process of SARM1 activation. The first step involves sub-lethal 'priming' activation of SARM1 mediated by the NAD+ precursor NMN, leading to the formation of covalent conjugates between the hydrolyzed product of NAD+, adenosine diphosphate ribose (ADPR), and the compounds catalyzed by the intrinsic base exchange activity of SARM1. In the second step, these ADPR-conjugates act as molecular glues, promoting the formation of self-proliferating superhelical filaments. On these filaments, SARM1's TIR domains adopt an active NADase configuration. As the superhelical filaments rapidly reach their limit of solubility, they precipitate out of the liquid phase as condensates with stable, fully activated NAD hydrolysis activity. Interestingly, we found that a series of reported SARM1 inhibitors currently under clinical development, which target the TIR enzymatic domain, can paradoxically activate SARM1's NADase activity via this mechanism. These findings provide new insights into how SARM1 activation is spatially restricted to damaged axons and offer important implications for the development of therapeutics targeting SARM1.