Two highly conserved eukaryotic gene products of unknown function showing homology to glycosyltransferases involved in the second steps of bacterial peptidoglycan (Murg) and capsular polysaccharide (Cps14f/Cps14g) biosynthesis have been identified in silico. The amino acid sequence of the eukaryotic protein that is homologous to the lipid acceptor- and membrane-associating N-terminal domain of Murg and the Cps14f beta4-galactosyltransferase enhancer protein is predicted to possess a cleavable signal peptide and transmembrane helices. The other eukaryotic protein is predicted to possess neither transmembrane regions nor a signal peptide but is homologous to the UDP-sugar binding C-terminal domain of Murg and the Cps14g beta4-galactosyltransferase. Both the eukaryotic proteins are encoded by essential genes in Saccharomyces cerevisiae, and down-regulation of either causes growth retardation, reduced N-glycosylation of carboxypeptidase Y, and accumulation of dolichyl-PP-GlcNAc. In vitro studies demonstrate that these proteins are required for transfer of [3H]GlcNAc from UDP-[3H]GlcNAc onto dolichyl-PP-GlcNAc. To conclude, two gene products showing homology to bacterial glycosyltransferases are required for the second step in dolichyl-PP-oligosaccharide biosynthesis.