NADPH is an electron carrier. The molecule exists in two forms that vary in whether or not they are carrying electrons. NADPH is the reduced form the of the molecule (has electrons). NADP⁺ is the oxidized form of the same molecule (lacks electrons). NADPH is produced in cells primarily by reactions in the pentose phosphate pathway. In plants, photosynthesis is another source of NADPH.

In contrast to the related compound, NADH, which donates electrons to the electron transport system for energy generation, NADPH donates electrons to biosynthetic reactions, such as the one below, catalyzed by ribonucleotide reductase:

CDP + NADPH <=> dCDP + NADP⁺