Knowledge of the Saccharomyces cerevisiae genes and proteins necessary for sphingolipid biosynthesis is far from complete. Such information should expedite studies of pathway regulation and sphingolipid functions. Using the Aur1 protein sequence, recently identified as necessary for synthesis of the sphingolipid inositol-P-ceramide (IPC), we show that a homolog (open reading frame YDR072c), termed Ipt1 (inositolphosphotransferase 1) is necessary for synthesis of mannose-(inositol-P)2-ceramide (M(IP)2C), the most abundant and complex sphingolipid in S. cerevisiae. This conclusion is based upon analysis of an ipt1-deletion strain, which fails to accumulate M(IP)2C and instead accumulates increased amounts of the precursor mannose-inositol-P-ceramide. The mutant also fails to incorporate radioactive precursors into M(IP)2C, and membranes prepared from it do not incorporate [3H-inositol]phosphatidylinositol into M(IP)2C, indicating a lack of M(IP)2C synthase activity (putatively phosphatidylinositol:mannose-inositol-P-ceramide phosphoinositol transferase). M(IP)2C synthase activity is inhibited in the micromolar range by aureobasidin A, but drug sensitivity is over 1000-fold lower than reported for IPC synthase activity. An ipt1-deletion mutant has no severe phenotypic effects but is slightly more resistant to growth inhibition by calcium ions. Identification of the IPT1 gene should be helpful in determining the function of the M(IP)2C sphingolipid and in determining the catalytic mechanism of IPC and M(IP)2C synthases.