In a screen of signal peptide-containing proteins from a mouse hypothetical protein library, we identified the mouse UDP-GlcNAc:lysosomal enzyme N-acetylglucosamine-1-phosphotransferase-gamma chain (GlcNAc-1-phosphotransferase-gamma) (GenBank accession no. , HYP36 in this study). The mouse GlcNAc-1-phosphotransferase-gamma was localized in the Golgi complex in cells and was expressed ubiquitously in mouse tissues, as shown by fluorescence microscope analysis and a semi-quantitative reverse transcription-polymerase chain reaction (RT-PCR) assay, respectively. Domain analysis showed that the mouse GlcNAc-1-phosphotransferase-gamma had a conserved mannose-6-phosphate (M-6-P)-binding domain. Interestingly, we found that overexpression of the mouse GlcNAc-1-phosphotransferase-gamma in fibroblast cell line NIH-3T3 induced accumulation of macromolecules, formation of large cytoplasmic vacuoles and decrease of lysosomal enzymes in cells. This phenotype was reminiscent of inclusion cells (I-cells) that were reported in mucolipidosis diseases caused by abnormal sorting of lysosomal proteins. Transient ectopic expression of GlcNAc-1-phosphotransferase-gamma in endoplasmic reticulum (ER) induced lowered lysosomal enzyme activity in cells. These results suggested on one hand that GlcNAc-1-phosphotransferase-gamma is an essential subunit of the GlcNAc-1-phosphotransferase, and on the other hand, the molecule might not only recognize the substrates of GlcNAc-1-phosphotransferase, but also the lysosomal proteins with M-6-P residuals.