Macrodomains are proteins that recognize and hydrolyze ADP ribose (ADPR) modifications of intracellular proteins. Macrodomains are implicated in viral genome replication and interference with host cell immune responses. They are important to the infectious cycle of Coronaviridae and Togaviridae viruses. We describe crystal structures of the conserved macrodomain from the bat coronavirus (CoV) HKU4 in complex with ligands. The structures reveal a binding cavity that accommodates ADPR and analogs via local structural changes within the pocket. Using a radioactive assay, we present evidence of mono-ADPR (MAR) hydrolase activity. In silico analysis presents further evidence on recognition of the ADPR modification for hydrolysis. Mutational analysis of residues within the binding pocket resulted in diminished enzymatic activity and binding affinity. We conclude that the common structural features observed in the macrodomain in a bat CoV contribute to a conserved function that can be extended to other known macrodomains.