Biosynthesis of glycosylphosphatidylinositol and N-glycan precursor is dependent upon a mannosyl donor, dolichol phosphate-mannose (DPM). The Thy-1negative class E mutant of mouse lymphoma and Lec15 mutant Chinese hamster ovary (CHO) cells are incapable of DPM synthesis. The class E mutant is defective in the DPM1 gene which encodes a mammalian homologue of Saccharomyces cerevisiae Dpm1p that is a DPM synthase, whereas Lec15 is a different mutant, indicating that mammalian DPM1 is not sufficient for DPM synthesis. Here we report expression cloning of a new gene, DPM2, which is defective in Lec15 cells. DPM2, an 84 amino acid membrane protein expressed in the endoplasmic reticulum (ER), makes a complex with DPM1 that is essential for the ER localization and stable expression of DPM1. Moreover, DPM2 enhances binding of dolichol phosphate, a substrate of DPM synthase. Mammalian DPM1 is catalytic because a fusion protein of DPM1 that was stably expressed in the ER synthesized DPM without DPM2. Therefore, biosynthesis of DPM in mammalian cells is regulated by DPM2.