Glycosylphosphatidylinositol (GPI) is used as a membrane anchor by many eukaryotic cell-surface proteins. The second step of GPI biosynthesis is de-N-acetylation of N-acetylglucosaminylphosphatidylinositol (GlcNAc-PI). We have previously cloned the rat PIG-L gene by expression cloning that complemented a mutant Chinese hamster ovary cell line defective in this step. Here we show that recombinant rat PIG-L protein purified from Escherichia coli as a complex with GroEL has GlcNAc-PI de-N-acetylase activity in vitro. The activity was not enhanced by GTP, which is known to enhance the de-N-acetylase activity of mammalian cell microsomes. As with other de-N-acetylases that act on the GlcNAc moiety, metal ions, in particular Mn2+ and Ni2+, enhanced the enzyme activity of PIG-L. The Saccharomyces cerevisiae YMR281W open reading frame encodes a protein (termed Gpi12p) with 24% amino acid identity with rat PIG-L. On transfection into mammalian PIG-L-deficient cells, this gene, GPI12, restored the cell-surface expression of GPI-anchored proteins and GlcNAc-PI de-N-acetylase activity. The disruption of the gene caused lethality in S. cerevisiae. These results indicate that GlcNAc-PI de-N-acetylase is conserved between mammals and yeasts and that the de-N-acetylation step is also indispensable in yeasts.