Phosphoglycerol transferase I, an enzyme of the inner, cytoplasmic membrane of Escherichia coli, catalyzes the in vitro transfer of phosphoglycerol residues from phosphatidylglycerol to membrane-derived oligosaccharides or to the model substrate arbutin (p-hydroxyphenyl-beta-D-glucoside). The products are a phosphoglycerol diester derivative of membrane-derived oligosaccharides or arbutin, respectively, and sn-1,2-diglyceride (B. J. Jackson and E. P. Kennedy, J. Biol. Chem. 258:2394-2398, 1983). Because this enzyme has its active site on the outer aspect of the inner membrane, it also catalyzes the transfer of phosphoglycerol residues to arbutin added to the medium (J.-P. Bohin and E. P. Kennedy, J. Biol. Chem. 259:8388-8393, 1984). When strains bearing the dgk mutation, which are defective in the enzyme diglyceride kinase, are grown in medium containing arbutin, they accumulate large amounts of sn-1,2-diglyceride, a product of the phosphoglycerol transferase I reaction. Growth is inhibited under these conditions. A further mutation in such a dgk strain, leading to the loss of phosphoglycerol transferase I activity, should result in the phenotype of arbutin resistance. We have exploited this fact to obtain strains with such mutations, designated mdoB, that map near min 99. Such mutants lack detectable phosphoglycerol transferase I activity, cannot transfer phosphoglycerol residues to arbutin in vivo, and synthesize membrane-derived oligosaccharides devoid of phosphoglycerol residues. These findings offer strong genetic support for the function of phosphoglycerol transferase I in membrane-derived oligosaccharide biosynthesis.