Anchoring of proteins to membranes by glycosylphosphatidylinositols (GPIs) is ubiquitous among all eukaryotes and heavily used by parasitic protozoa. GPI is synthesized and transferred en bloc to form GPI-anchored proteins. The key enzyme in this process is a putative GPI:protein transamidase that would cleave a peptide bond near the COOH terminus of the protein and attach the GPI by an amide linkage. We have identified a gene, GAA1, encoding an essential ER protein required for GPI anchoring. gaal mutant cells synthesize the complete GPI anchor precursor at nonpermissive temperatures, but do not attach it to proteins. Overexpression of GAA1 improves the ability of cells to attach anchors to a GPI-anchored protein with a mutant anchor attachment site. Therefore, Gaa1p is required for a terminal step of GPI anchor attachment and could be part of the putative GPI:protein transamidase.