Protein post-translational modifications (PTMs) are an important battleground in the evolutionary arms races that are waged between the host innate immune system and viruses. One such PTM, ADP-ribosylation, has recently emerged as an important mediator of host antiviral immunity. Important for the host-virus conflict over this PTM is the addition of ADP-ribose by PARP proteins and removal of ADP-ribose by macrodomain-containing proteins. Interestingly, several host proteins, known as macroPARPs, contain macrodomains as well as a PARP domain, and these proteins are both important for the host antiviral immune response and evolving under very strong positive (diversifying) evolutionary selection. In addition, several viruses, including alphaviruses and coronaviruses, encode one or more macrodomains. Despite the presence of the conserved macrodomain fold, the enzymatic activity of many of these proteins has not been characterized. Here, we perform evolutionary and functional analyses to characterize the activity of macroPARP and viral macrodomains. We trace the evolutionary history of macroPARPs in metazoans and show that PARP9 and PARP14 contain a single active macrodomain, whereas PARP15 contains none. Interestingly, we also reveal several independent losses of macrodomain enzymatic activity within mammalian PARP14, including in the bat, ungulate, and carnivore lineages. Similar to macroPARPs, coronaviruses contain up to three macrodomains, with only the first displaying catalytic activity. Intriguingly, we also reveal the recurrent loss of macrodomain activity within the alphavirus group of viruses, including enzymatic loss in insect-specific alphaviruses as well as independent enzymatic losses in two human-infecting viruses. Together, our evolutionary and functional data reveal an unexpected turnover in macrodomain activity in both host antiviral proteins and viral proteins.