The temperature-sensitive Saccharomyces cerevisiae gpi1 mutant is blocked in [3H]inositol incorporation into protein and defective in the synthesis of N-acetylglucosaminylphosphatidylinositol, the first step in glycosylphosphatidylinositol (GPI) anchor assembly (Leidich, S. D., Drapp, D. A., and Orlean, P. (1994) J. Biol. Chem. 269, 10193-10196). The GPI1 gene, which encodes a 609-amino acid membrane protein, was cloned by complementation of the temperature sensitivity of gpi1 and corrects the mutant's [3H]inositol labeling and enzymatic defects. Disruption of GPI1 yields viable haploid cells that are temperature-sensitive for growth, for [3H]inositol incorporation into protein, and for GPI anchor-dependent processing of the Gas1/Ggp1 protein and that lack in vitro N-acetylglucosaminylphosphatidylinositol synthetic activity. The Gpi1 protein thus participates in GPI synthesis and is required for growth at 37 degrees C. When grown at a semipermissive temperature of 30 degrees C, gpi1 cells and gpi1::URA3 disruptants form large, round, multiply budded cells with a separation defect. Homozygous gpi1/gpi1, gpi1::URA3/gpi1::URA3, gpi2/gpi2, and gpi3/gpi3 diploids undergo meiosis, but are defective in ascospore wall maturation for they fail to give the fluorescence due to the dityrosine-containing layer in the ascospore wall. These findings indicate that GPIs have key roles in the morphogenesis and development of S. cerevisiae.