The KNH1 gene from Saccharomyces cerevisiae was identified as an open reading frame on the right arm of chromosome IV. The product encoded by the KNH1 gene, Knhlp, shares 46% overall identity with Kre9p, a protein required for cell surface beta 1,6-glucan synthesis. While disruption of the KNH1 locus had no effect on cell growth, killer toxin sensitivity or beta 1,6-glucan levels, overexpression of KNH1 was found to suppress the severe growth defect of a kre9 delta mutant and restored the level of alkali-insoluble beta 1,6-glucan to almost wild-type levels. Knhlp, like Kre9p, can be found in the extracellular culture medium as an O-glycoprotein, with a molecular mass of 45-61 kDa. Disruption of both KNH1 and KRE9 is lethal, and unlike single kre9 delta mutants, could not be rescued by overproducing SKN7, a putative transcription factor involved in the regulation of extracellular matrix assembly. Transcription of KNH1 was found to be carbon-source and kre9 delta dependent, but SKN7 independent, suggesting that KNH1 is subject to alternative transcriptional control.