SARM1 (sterile alpha and TIR motif containing 1) is a key executioner of axon degeneration and a promising therapeutic target for neurodegenerative disorders. It catalyzes the cleavage of the essential metabolite nicotinamide adenine dinucleotide (NAD+) in neurons, leading to axon degeneration and eventual neuronal death. High-throughput screening had identified 5-iodo-isoquinoline, a small molecule with only 11 heavy atoms, as a potent inhibitor of SARM1 (IC50 = 75 nM). Employing NMR-based enzymatic assays, we demonstrated that 5-iodo-isoquinoline undergoes a base-exchange reaction with the nicotinamide base of NAD+, and that the product, namely 1AD, is the bona fide inhibitor. We further uncovered the double-displacement catalytic mechanism of the base-exchange reaction. In addition, our NMR-based assays showed that similar base-exchange reactions can occur with other pyridine and isoquinoline derivatives, and that base-exchange activity is likely to be common among TIR motif containing proteins. While some base-exchange products have become valuable chemical probes for structural biology, this mechanism is also being leveraged to develop further inhibitors of SARM1 and axon degeneration.