Dolichyl-phosphate-mannose synthase is a membrane-bound enzyme of the endoplasmic reticulum that catalyzes the formation of dolichyl phosphate mannose from dolichyl phosphate and GDP-mannose. It is an essential enzyme for growth of Saccharomyces cerevisiae, and, like other enzymes that utilize some form of the lipid dolichol as substrate, dolichyl-phosphate-mannose synthase contains a putative "dolichol recognition sequence" in the predicted membrane-spanning domain. To investigate the importance of this sequence in particular and the hydrophobic region in general, a series of mutants of dolichyl-phosphate-mannose synthase were constructed that contained successive deletions or mutations of the hydrophobic region, and their in vivo functions and in vitro activities were examined. While all of the mutant proteins exhibited decreased transferase activities in vitro compared to the wild-type enzyme, the sequence was not essential for growth or for protein glycosylation in S. cerevisiae. Interestingly, although deletion of the entire hydrophobic region resulted in a soluble protein, mutant proteins containing 3 or 8 hydrophobic residues at the carboxyl terminus were still membrane-associated. These mutant proteins could be released from membranes by treatment with sodium carbonate, indicating peripheral associations.