Sialic acids are important sugars at the reducing end of glycoproteins and glycolipids. They are among many other functions involved in cell-cell interactions, host-pathogen recognition and the regulation of serum half-life of glycoproteins. An important modification of sialic acids is O-acetylation, which can alter or mask the biological properties of the parent sialic acid molecule. The nature of mammalian sialate-O-acetyltransferases (EC 126.96.36.199) involved in their biosynthesis is still unknown. We have identified the human CasD1 (capsule structure1 domain containing 1) gene as a candidate to encode the elusive enzyme. The human CasD1 gene encodes a protein with a serine-glycine-asparagine-histidine hydrolase domain and a hydrophobic transmembrane domain. Expression of the Cas1 protein tagged with enhanced green fluorescent protein in mammalian and insect cells directed the protein to the medial and trans-cisternae of the Golgi. Overexpression of the Cas1 protein in combination with α-N-acetyl-neuraminide α-2,8-sialyltransferase 1 (GD3 synthase) resulted in an up to 40% increased biosynthesis of 7-O-acetylated ganglioside GD3. By quantitative real-time polymerase chain reaction, we found up to 5-fold increase in CasD1 mRNA in tumor cells overexpressing O-Ac-GD3. CasD1-specific small interfering RNA reduced O-acetylation in tumor cells. These results suggest that the human Cas1 protein is directly involved in O-acetylation of α2-8-linked sialic acids.