N-glycosylation in nearly all eukaryotes proceeds in the endoplasmic reticulum (ER) by transfer of the precursor Glc(3)Man(9)GlcNAc(2) from dolichyl pyrophosphate (PP-Dol) to consensus Asn residues in nascent proteins. The Saccharomyces cerevisiae alg (asparagine-linked glycosylation) mutants fail to synthesize oligosaccharide lipid properly, and the alg12 mutant accumulates a Man(7)GlcNAc(2)-PP-Dol intermediate. We show that the Man(7)GlcNAc(2) released from alg12Delta-secreted invertase is Manalpha1,2Manalpha1,2Manalpha1,3(Manalpha1,2Manalpha1,3Manalpha1,6)-Manbeta1,4-GlcNAcbeta1-4GlcNAcalpha/beta, confirming that the Man(7)GlcNAc(2) is the product of the middle-arm terminal alpha1,2-mannoslytransferase encoded by the ALG9 gene. Although the ER glucose addition and trimming events are similar in alg12Delta and wild-type cells, the central-arm alpha1,2-linked Man residue normally removed in the ER by Mns1p persists in the alg12Delta background. This confirms in vivo earlier in vitro experiments showing that the upper-arm Manalpha1,2Manalpha1,6-disaccharide moiety, missing in alg12Delta Man(7)GlcNAc(2), is recognized and required by Mns1p for optimum mannosidase activity. The presence of this Man influences downstream glycan processing by reducing the efficiency of Ochlp, the cis-Golgi alpha1,6-mannosyltransferase responsible for initiating outer-chain mannan synthesis, leading to hypoglycosylation of external invertase and vacuolar protease A.