The C-4 hydroxylation of sphinganine and dihydroceramide is a rate-limiting reaction in the biosynthesis of phytosphingolipids. Mouse DES1 (MDES1) cDNA homologous to the Drosophila melanogaster degenerative spermatocyte gene-1 (des-1) cDNA leads to sphingosine Delta4-desaturase activity, and another mouse homologue, MDES2, has bifunctional activity, producing C-4 hydroxysphinganine and Delta4-sphingenine in yeast [Ternes, Franke, Zahringer, Sperling and Heinz (2002) J. Biol. Chem. 277, 25512-25518]. Here, we report the characterization of mouse DES2 (MDES2) using an in vitro assay with a homogenate of COS-7 cells transfected with MDES2 cDNA and N -octanoyl-sphinganine and sphinganine as substrates. MDES2 protein prefers dihydroceramide as a substrate to sphinganine, and exhibits dihydroceramide Delta4-desaturase and C-4 hydroxylase activities. MDES2 mRNA content was high in the small intestine and abundant in the kidney. In situ hybridization detected signals of MDES2 mRNA in the crypt cells. Immunohistochemistry using an anti-MDES2 peptide antibody stained the crypt cells and the adjacent epithelial cells. These results suggest that MDES2 is the dihydroceramide C-4 hydroxylase responsible for the biosynthesis of enriched phytosphingoglycolipids in the microvillous membranes of intestinal epithelial cells.