Saccharomyces cerevisiae mutants lacking Scs7p fail to accumulate the inositolphosphorylceramide (IPC) species. IPC-C, which is the predominant form found in wild-type cells. Instead scs7 mutants accumulate an IPC-B species believed to be unhydroxylated on the amide-linked C26-fatty acid. Elimination of the SCS7 gene suppresses the Ca(2+)-sensitive phenotype of csg1 and csg2 mutants. The CSG1 and CSG2 genes are required for mannosylation of IPC-C and accumulation of IPC-C by the csg mutants renders them Ca(2+)-sensitive. The SCS7 gene encodes a protein that contains both a cytochrome b5-like domain and a domain that resembles the family of cytochrome b5-dependent enzymes that use iron and oxygen to catalyse desaturation or hydroxylation of fatty acids and sterols. Scs7p is therefore likely to be the enzyme that hydroxylates the C26-fatty acid of IPC-C.