The human NUDT12 Nudix hydrolase has been expressed in insect cells from a baculovirus vector as a His-tagged recombinant protein. In vitro, it efficiently hydrolyses NAD(P)H to NMNH and AMP (2′,5′-ADP), and diadenosine diphosphate to AMP. It also has activity towards NAD(P)+, ADP-ribose and diadenosine triphosphate. Km values for NADH, NADPH and NAD+ are 11, 16 and 190 μM and kcat values are 11, 16 and 10.5 s−1 respectively. Thus, like other NADH diphosphatases of the Nudix family, NUDT12 has a marked substrate preference for the reduced nicotinamide nucleotides. Optimal activity was supported by 50 μM Mn2+ ions in vitro, with 3-fold lower activity at 0.4 mM Mg2+. Expression of NUDT12 as a C-terminal fusion to green fluorescent protein revealed that it was targeted to peroxisomes by the C-terminal tripeptide PNL acting as a novel type 1 peroxisomal targeting signal. Deletion of PNL resulted in diffuse cellular fluorescence. In addition, C-terminal, but not N-terminal, fusions with or without the PNL signal accumulated in large, unidentified cytoplasmic structures. NUDT12 may act to regulate the concentration of peroxisomal nicotinamide nucleotide cofactors required for oxidative metabolism in this organelle.