Poly-ADP-ribosylation is a post-translational modification that regulates processes involved in genome stability. Breakdown of the poly(ADP-ribose) (PAR) polymer is catalysed by poly(ADP-ribose) glycohydrolase (PARG), whose endo-glycohydrolase activity generates PAR fragments. Here we present the crystal structure of PARG incorporating the PAR substrate. The two terminal ADP-ribose units of the polymeric substrate are bound in exo-mode. Biochemical and modelling studies reveal that PARG acts predominantly as an exo-glycohydrolase. This preference is linked to Phe902 (human numbering), which is responsible for low-affinity binding of the substrate in endo-mode. Our data reveal the mechanism of poly-ADP-ribosylation reversal, with ADP-ribose as the dominant product, and suggest that the release of apoptotic PAR fragments occurs at unusual PAR/PARG ratios.