Saccharomyces cerevisiae Gpi3p is the UDP-GlcNAc-binding and presumed catalytic subunit of the enzyme that forms GlcNAc-phosphatidylinositol in glycosylphosphatidylinositol biosynthesis. It is an essential protein with an EX 7 E motif that is conserved in four families of retaining glycosyltransferases. All Gpi3ps contain a cysteine residue four residues C-terminal to EX 7 E. To test their importance for Gpi3p function in vivo, Glu289 and 297 in the EX 7 E motif of S. cerevisiae Gpi3p, as well as Cys301, were altered by sitespecific mutagenesis, and the mutant proteins tested for their ability to complement nonviable GPI3-deleted haploids. Gpi3p-C301A supported growth but membranes from C301A-expressing cells had low in vitro N-acetylglucosaminylphosphatidylinositol (GlcNAc-PI) synthetic activity. Haploids harboring Gpi3p-E289A proved viable, although slow growing but Gpi3-E297A did not support growth. The E289D and E297D mutants both supported growth at 25°C, but, whereas the E289D strain grew at 37°C, the E297D mutant did not. Membranes from E289D mutants had severely reduced in vitro GlcNAc-PI synthetic activity and E297D membranes had none. The mutation of the first Glu in the EX 7 E motif of Schizosaccharomyces pombe Gpi3p (Glu277) to Asp complemented the lethal null mutation in gpi3 + and supported growth at 37°C, but the E285D mutant was nonviable. Our results suggest that the second Glu residue of the EX 7 E motif in Gpi3p is of greater importance than the first for function in vivo. Further, our findings do not support previous suggestions that the first Glu of an EX 7 E protein is the nucleophile and that Cys301 has an important role in UDP-GlcNAc binding by Gpi3ps.