The nonstructural protein 3 (NSP3) macrodomain of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Mac1) removes adenosine diphosphate (ADP) ribosylation posttranslational modifications, playing a key role in the immune evasion capabilities of the virus responsible for the coronavirus disease 2019 pandemic. Here, we determined neutron and x-ray crystal structures of the SARS-CoV-2 NSP3 macrodomain using multiple crystal forms, temperatures, and pHs, across the apo and ADP-ribose-bound states. We characterize extensive solvation in the Mac1 active site and visualize how water networks reorganize upon binding of ADP-ribose and non-native ligands, inspiring strategies for displacing waters to increase the potency of Mac1 inhibitors. Determining the precise orientations of active site water molecules and the protonation states of key catalytic site residues by neutron crystallography suggests a catalytic mechanism for coronavirus macrodomains distinct from the substrate-assisted mechanism proposed for human MacroD2. These data provoke a reevaluation of macrodomain catalytic mechanisms and will guide the optimization of Mac1 inhibitors.