1. An enzyme has been isolated from Drosophila embryos which specifically hydrolyzes dinucleoside tetraphosphates to the corresponding nucleoside tri- and tetraphosphates, with Km values around 4 microM. 2. Nucleoside mono-, di- and triphosphates are competitive inhibitors with K1 values i the 0.01 mM range. 3. The inhibition is particularly strong by adenosine tetraphosphate (Ki = 10 nM). 4. The enzyme is maximally active at pH 7.5 and is quite stable at acid pH. 5. The enzyme requires divalent cations for activity: Co(2+) much greater than [corrected] Mn(2+) Mg(2+) x Co(2+) stimulated about 90-fold at 6 mM. 6. The specific stimulation by Co(2+) has been described before, but at lower concentrations, for the enzyme of procaryotes which splits diadenosine tetraphosphate symmetrically. Zn(2+) and Ca(2+) are inhibitors of the Drosophila enzyme. Co(2+) is also inhibitor in the presence of Mg(2+). 7. The Drosophila enzyme has essential sulphydryl group(s) and a molecular weight of 26,000. 8. Diadenosine tetraphosphatase is present in mature oocytes and increases after fertilization to reach a peak 1.5 hr later. 9. From this time to 3.5 hr the activity decreased to remain at a plateau until the end of embryogenesis. 10. The profile of activity is compatible with its involvement in the regulation of nuclear division.