The product of the Schizosaccharomyces pombe cwg2+ gene is involved in the biosynthesis of beta-D-glucan. When grown at the non-permissive temperature, cwg2-1 mutant cells lyse in the absence of an osmotic stabilizer and display a reduced (1-3) beta-D-glucan content and (1-3) beta-D-glucan synthase activity. The cwg2+ gene was cloned by the rescue of the cwg2-1 mutant phenotype using an S. pombe genomic library and subsequently verified by integration of the appropriate insert into the S. pombe genome. Determination of the nucleotide sequence of this gene revealed a putative open reading frame of 1065 bp encoding a polypeptide of 355 amino acids with a calculated M(r) of 40,019. The cwg2+ DNA hybridizes to a main transcript, the 5' end of which maps to a position 469 bp upstream of the predicted start of translation. The sequence between the transcription and the translation start sites is unusually long and has several short open reading frames which suggest a translational control of the gene expression. Comparative analysis of the predicted amino acid sequence shows that it possesses significant similarity to three Saccharomyces cerevisiae proteins, encoded by the DPR1/RAM1, CDC43/CAL1 and ORF2/BET2 genes respectively, which are beta subunits of different prenyltransferases. When grown at 37 degrees C, cwg2-1 mutant extracts were specifically deficient in geranylgeranyltransferase type I activity, as measured in vitro. Multiple copies of the CDC43 gene can partially suppress the growth and (1-3) beta-D-glucan synthase defect of the cwg2-1 mutant at the restrictive temperature. In a similar manner, the cwg2+ gene can partially suppress the cdc43-2 growth defect. These results indicate that cwg2+ is the structural gene for the beta subunit of geranylgeranyltransferase type I in S. pombe and that this enzyme is required for (1-3) beta-D-glucan synthase activity. The functional homology of Cwg2 with Cdc43, which has been implicated in the control of cell polarity, suggests a link between two morphogenetic events such as establishment of cell polarity and cell wall biosynthesis.