The protozoan parasite Trypanosoma brucei is coated by glycosylphosphatidylinositol (GPI)-anchored proteins. During GPI biosynthesis, inositol in phosphatidylinositol becomes acylated. Inositol is deacylated prior to attachment to variant surface glycoproteins in the bloodstream form, whereas it remains acylated in procyclins in the procyclic form. We have cloned a T. brucei GPI inositol deacylase (GPIdeAc2). In accordance with the acylation/deacylation profile, the level of GPIdeAc2 mRNA was 6-fold higher in the bloodstream form than in the procyclic form. Knockdown of GPIdeAc2 in the bloodstream form caused accumulation of an inositol-acylated GPI, a decreased VSG expression on the cell surface and slower growth, indicating that inositol-deacylation is essential for the growth of the bloodstream form. Overexpression of GPIdeAc2 in the procyclic form caused an accumulation of GPI biosynthetic intermediates lacking inositol-linked acyl chain and decreased cell surface procyclins because of release into the culture medium, indicating that overexpression of GPIdeAc2 is deleterious to the surface coat of the procyclic form. Therefore, the GPI inositol deacylase activity must be tightly regulated in trypanosome life cycle.