It has been proposed that cytoplasmic peptide:N-glycanase (PNGase) may be involved in the proteasome-dependent quality control machinery used to degrade newly synthesized glycoproteins that do not correctly fold in the ER. However, a lack of information about the structure of the enzyme has limited our ability to obtain insight into its precise biological function. A PNGase-defective mutant (png1-1) was identified by screening a collection of mutagenized strains for the absence of PNGase activity in cell extracts. The PNG1 gene was mapped to the left arm of chromosome XVI by genetic approaches and its open reading frame was identified. PNG1 encodes a soluble protein that, when expressed in Escherichia coli, exhibited PNGase activity. PNG1 may be required for efficient proteasome-mediated degradation of a misfolded glycoprotein. Subcellular localization studies indicate that Png1p is present in the nucleus as well as the cytosol. Sequencing of expressed sequence tag clones revealed that Png1p is highly conserved in a wide variety of eukaryotes including mammals, suggesting that the enzyme has an important function.