Transient Receptor Potential Melastatin 2 (TRPM2) channels are Ca2+-permeable nonselective cation channels that open under conditions of oxidative stress and play important roles in immune cell activation, insulin secretion, and postischemic cell death. They are activated by ADP ribose (ADPR) binding to the carboxy-terminal cytosolic NUDT9-homology (NUDT9H) domain, and modulated in intact cells by a variety of signaling molecules, including Ca2+, various adenine nucleotides, and H2O2. Furthermore, the NUDT9H domain was reported to hydrolyze ADPR, classifying TRPM2 as a channel-enzyme. We have studied TRPM2 channels in cell-free inside-out patches, under rapid direct superfusion of the cytosolic channel surface. Rundown of TRPM2 channels following patch excision could be prevented by a pore substitution. Combining electrophysiology with biochemical purification of test compounds ruled out direct effects by the majority of proposed modulators, and identified only three essential direct activators: ADPR, Ca2+, and phosphatydylinositol-bisphosphate (PIP2), simultaneous presence of all three of which is required for channel gating. So far, ADPR-2′-phosphate is the only identified natural ADPR substitute capable of channel activation. All other proposed modulators must act indirectly, by altering the local concentrations of the three primary agonists in intact cells. The binding sites for activating Ca2+ are intracellular, but in close proximity of the cytosolic pore entrance. PIP2 is bound with high affinity, but complete PIP2 depletion inactivates the channels. NUDT9H catalytic site mutations do not affect channel gating, and a non-hydrolyzable ADPR analog supports near-normal channel activity, demonstrating that ADPR hydrolysis is not linked to channel gating. Soluble chimeric models of the isolated NUDT9H domain are capable of ligand binding, but display no ADPRase activity, suggesting that TRPM2 is not a channel-enzyme.