Poly(ADP-ribose) polymerase 1 (PARP1) synthesizes poly(ADP-ribose) (PAR) using nicotinamide adenine dinucleotide (NAD) as a substrate. Despite intensive research on the cellular functions of PARP1, the molecular mechanism of PAR formation has not been comprehensively understood. In this study, we elucidate the molecular mechanisms of poly(ADP-ribosyl)ation and identify PAR acceptor sites. Generation of different chimera proteins revealed that the amino-terminal domains of PARP1, PARP2 and PARP3 cooperate tightly with their corresponding catalytic domains. The DNA-dependent interaction between the amino-terminal DNA-binding domain and the catalytic domain of PARP1 increased V_max and decreased the K_m for NAD. Furthermore, we show that glutamic acid residues in the auto-modification domain of PARP1 are not required for PAR formation. Instead, we identify individual lysine residues as acceptor sites for ADP-ribosylation. Together, our findings provide novel mechanistic insights into PAR synthesis with significant relevance for the different biological functions of PARP family members.