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Nicotinamide adenine dinucleotide (NAD) serves as a cap-like structure on cellular RNAs (NAD-RNAs) in all domains of life including the bacterium Escherichia coli. NAD also acts as a key molecule in phage-host interactions, where bacterial immune systems deplete NAD to abort phage infection. Nevertheless, NAD-RNAs have not yet been identified during phage infections of bacteria and the mechanisms of their synthesis and degradation are unknown in this context. The T4 phage that specifically infects E. coli presents an important model to study phage infections, but a systematic analysis of the presence and dynamics of NAD-RNAs during T4 phage infection is lacking. Here, we investigate the presence of NAD-RNAs during T4 phage infection in a dual manner. By applying time-resolved NAD captureSeq, we identify NAD-capped host and phage transcripts and their dynamic regulation during phage infection. We provide evidence that NAD-RNAs are – as reported earlier – generated by the host RNA polymerase by initiating transcription with NAD at canonical transcription start sites. In addition, we characterize NudE.1 – a T4 phage-encoded Nudix hydrolase – as the first phage-encoded NAD-RNA decapping enzyme. T4 phages carrying inactive NudE.1 display a delayed lysis phenotype. This study investigates for the first time the dual epitranscriptome of a phage and its host, thereby introducing epitranscriptomics as an important field of phage research.