Protein O-mannosylation is an essential protein modification. It is initiated at the endoplasmic reticulum by a family of dolichyl phosphate-mannose:protein O-mannosyltransferases (Pmts), which is evolutionarily conserved from yeast to humans. Saccharomyces cerevisiae Pmt1p is an integral membrane protein of the endoplasmic reticulum. ScPmt1p forms a complex with ScPmt2p that is required for maximum transferase activity. Recently, we proposed a seven-transmembrane structural model for ScPmt1p. A large, hydrophilic, endoplasmic reticulum-oriented segment is flanked by five amino-terminal and two carboxyl-terminal membrane-spanning domains. Based on this model, a structure-function analysis of ScPmt1p was performed. Deletion mutagenesis identified the N-terminal third of the transferase as being essential for the formation of a functional ScPmt1p-ScPmt2p complex. Deletion of the central hydrophilic loop eliminates mannosyltransferase activity, but not ScPmt1p-ScPmt2p interactions. Alignment of all fully characterized PMT family members revealed that this central loop region contains three highly conserved peptide motifs, which can be considered as signatures of the PMT family. In addition, a number of invariant amino acid residues were identified throughout the entire protein sequence. In order to evaluate the functional significance of these conserved residues site-directed mutagenesis was performed. We show that several amino acid substitutions in the conserved motifs significantly reduce ScPmt1p activity. Further, the invariant residues Arg-64, Glu-78, Arg-138, and Leu-408 are essential for ScPmt1p function. In particular, Arg-138 is crucial for ScPmt1p-ScPmt2p complex formation.