N-Glycosylation in the yeast Saccharomyces cerevisiae entails the synthesis of a Glc3Man9GlcNAc2 oligosaccharide precursor which is subsequently transferred to suitable protein acceptors, a process which is conserved among all eukaryotes. Processing of the oligosaccharide occurs immediately following this transfer, the first step being the removal of the terminal alpha-1,2-linked glucose by glucosidase I in the endoplasmic reticulum. Although yeast glucosidase I has been isolated, the yeast gene encoding this enzyme has not yet been identified. In the present work, it is shown that Cwh41p, a yeast endoplasmic reticulum protein previously identified as being required for normal cell wall beta-1,6-glucan synthesis (Jiang, Sheraton, Ram, Dijkgraaf, Klis, and Bussey (1996) J. Bacteriol., 178, 1162-1171), has significant amino acid similarity to the product of the human glucosidase I cDNA. Tetrad analysis for glucosidase I activity in vitro and in vivo was done on the progeny from the spores obtained from the heterozygous diploid, cwh41 delta::HIS3. It is shown that, unlike CWH41 cells, cell extracts obtained from cwh41 delta null mutants are unable to release glucose residues from the synthetic trisaccharide substrate alpha-D-Glc 1-->2 alpha-D-Glc 1-->3 alpha-D-Glc-O(CH2)8 COOCH3 in vitro. Following 1 h labeling of cells with [3H]mannose, analysis by high pressure liquid chromatography of the labeled N-linked oligosaccharides, combined with treatment with jack bean alpha mannosidase and yeast glucosidase I, shows that the oligosaccharides isolated form a cwh41 delta null mutant are fully glucosylated, retaining the three terminal glucose residues, whereas the oligosaccharides from CWH41 cells do not have any glucose residues. These results showing a lack of glucosidase I activity in cwh41 delta null mutants both in vitro and in vivo are consistent with the structural evidence that CWH41 encodes the yeast glucosidase I.