RNA 5'-modification with NAD+/NADH (oxidized/reduced nicotinamide adenine dinucleotide) has been found in bacteria, eukaryotes and viruses. 5'-NAD is incorporated into RNA by RNA polymerases (RNAPs) during the initiation of synthesis. It is unknown (i) which factors and physiological conditions permit substantial NAD incorporation into RNA in vivo and (ii) how 5'-NAD impacts gene expression and the fate of RNA in bacteria. Here we show in Escherichia coli that RNA NADylation is stimulated by low cellular concentration of the competing substrate ATP, and by weakening ATP contacts with RNAP active site. Additionally, RNA NADylation may be influenced by DNA supercoiling. RNA NADylation does not interfere with posttranscriptional RNA processing by major ribonuclease RNase E. It does not impact the base-pairing between RNAI, the repressor of plasmid replication, and its antisense target, RNAII. Leaderless NADylated model mRNA cI-lacZ is recognized by the 70S ribosome and is translated with the same efficiency as triphosphorylated cI-lacZ mRNA. Translation exposes the 5'-NAD of this mRNA to de-capping by NudC enzyme. We suggest that NADylated mRNAs are rapidly degraded, consistent with their low abundance in published datasets. Furthermore, we observed that ppGpp inhibits NudC de-capping activity, contributing to the growth phase-dependency of NADylated RNA levels.