NOD is a Drosophila chromosome-associated kinesin-like protein that does not fall into the chromokinesin subfamily. Although NOD lacks residues known to be critical for kinesin function, we show that microtubules activate the ATPase activity of NOD >2000-fold. Biochemical and genetic analysis of two genetically identified mutations of NOD (NODDTW and NOD"DR2") demonstrates that this allosteric activation is critical for the function of NOD in vivo. However, several lines of evidence indicate that this ATPase activity is not coupled to vectorial transport, including 1) NOD does not produce microtubule gliding; and 2) the substitution of a single amino acid in the Drosophila kinesin heavy chain with the analogous amino acid in NOD results in a drastic inhibition of motility. We suggest that the microtubule-activated ATPase activity of NOD provides transient attachments of chromosomes to microtubules rather than producing vectorial transport.