Heparan sulfate/heparin N-deacetylase/N-sulfotransferase-1 (NDST-1) is a critical enzyme involved in heparan sulfate/heparin biosynthesis. This dual-function enzyme modifies the GlcNAc-GlcA disaccharide repeating sugar backbone to make N-sulfated heparosan. N-sulfation is an absolute requirement for the subsequent epimerization and O-sulfation steps in heparan sulfate/heparin biosynthesis. We have expressed rat liver (r) NDST-1 in Saccharomyces cerevisiae as a soluble protein. The yeast-expressed enzyme has both N-deacetylase and N-sulfotransferase activities. N-acetyl heparosan, isolated from Escherichia coli K5 polysaccharide, de-N-sulfated heparin (DNSH) and completely desulfated N-acetylated heparan sulfate (CDSNAcHS) are all good substrates for the rNDST-1. However, N-desulfated, N-acetylated heparin (NDSNAcH) is a poor substrate. The rNDST-1 was partially purified on heparin Sepharose CL-6B. Purified rNDST-1 requires Mn(2+) for its enzymatic activity, can utilize PAPS regenerated in vitro by the PAPS cycle (PAP plus para-nitrophenylsulfate in the presence of arylsulfotransferase IV), and with the addition of exogenous PAPS is capable of producing 60-65% N-sulfated heparosan from E. coli K5 polysaccharide or Pasteurella multocida polysaccharide.