EXTL2, an alpha1,4-N-acetylhexosaminyltransferase, catalyzes the transfer reaction of N-acetylglucosamine and N-acetylgalactosamine from the respective UDP-sugars to the non-reducing end of [glucuronic acid]beta1-3[galactose]beta1-O-naphthalenemethanol, an acceptor substrate analog of the natural common linker of various glycosylaminoglycans. We have solved the x-ray crystal structure of the catalytic domain of mouse EXTL2 in the apo-form and with donor substrates UDP-N-acetylglucosamine and UDP-N-acetylgalactosamine. In addition, a structure of the ternary complex with UDP and the acceptor substrate analog [glucuronic acid]beta1-3[galactose]beta1-O-naphthalenemethanol has been determined. These structures reveal three highly conserved residues, Asn-243, Asp-246, and Arg-293, located at the active site. Mutation of these residues greatly decreases the activity. In the ternary complex, an interaction exists between the beta-phosphate of the UDP leaving group and the acceptor hydroxyl of the substrate that may play a functional role in catalysis. These structures represent the first structures from the exostosin gene family and provide important insight into the mechanisms of alpha1,4-N-acetylhexosaminyl transfer in heparan biosynthesis.