Two distinct adenosine deaminases, ADA1 and ADA2, are found in humans. ADA1 has an important role in lymphocyte function and inherited mutations in ADA1 result in severe combined immunodeficiency. The recently isolated ADA2 belongs to the novel family of adenosine deaminase growth factors (ADGFs), which play an important role in tissue development. The crystal structures of ADA2 and ADA2 bound to a transition state analogue presented here reveal the structural basis of the catalytic/signaling activity of ADGF/ADA2 proteins. In addition to the catalytic domain, the structures discovered two ADGF/ADA2-specific domains of novel folds that mediate the protein dimerization and binding to the cell surface receptors. This complex architecture is in sharp contrast with that of monomeric single domain ADA1. An extensive glycosylation and the presence of a conserved disulfide bond and a signal peptide in ADA2 strongly suggest that ADA2, in contrast to ADA1, is specifically designed to act in the extracellular environment. The comparison of catalytic sites of ADA2 and ADA1 demonstrates large differences in the arrangement of the substrate-binding pockets. These structural differences explain the substrate and inhibitor specificity of adenosine deaminases and provide the basis for a rational design of ADA2-targeting drugs to modulate the immune system responses in pathophysiological conditions.