ADP-ribosylation is a posttranslational modification that exists in monomeric and polymeric forms. Whereas the writers (e.g. ARTD1/PARP1) and erasers (e.g. PARG, ARH3) of poly-ADP-ribosylation (PARylation) are relatively well described, the enzymes involved in mono-ADP-ribosylation (MARylation) have been less well investigated. While erasers for the MARylation of glutamate/aspartate and arginine have been identified, the respective enzymes with specificity for serine were missing. Here we report that, in vitro, ARH3 specifically binds and demodifies proteins and peptides that are MARylated. Molecular modeling and site-directed mutagenesis of ARH3 revealed that numerous residues are critical for both the mono- and the poly-ADP-ribosylhydrolase activity of ARH3. Notably, a mass spectrometric approach showed that ARH3-deficient mouse embryonic fibroblasts are characterized by a specific increase in serine-ADP-ribosylation in vivo under untreated conditions as well as following hydrogen peroxide stress. Together, our results establish ARH3 as a serine mono-ADP-ribosylhydrolase and as an important regulator of the basal and stress-induced ADP-ribosylome.