A 110-kDa protein involved in heparin biosynthesis in mouse mastocytoma cells was previously shown to express both glucosaminyl N-deacetylase and N-sulfotransferase activity. In this study, the complete nucleotide sequence corresponding to this protein is reported. The mRNA, estimated to contain 3.9 kilobases encodes a protein with an M(r) of 101,092. The predicted domain structure of the protein resembles those of previously characterized Golgi proteins with an N-terminal cytoplasmic tail, a single membrane-spanning domain, and a large catalytic domain linked to the transmembrane domain through a "stem region." Comparison of the deduced amino acid sequence of the mouse mastocytoma protein and a previously cloned similar enzyme from rat liver demonstrated that while large portions of the proteins, corresponding essentially to the putative catalytic domains, were closely related, other portions, in particular in the N-terminal parts, were markedly different. The divergence was not due to species differences since two separate mouse transcripts could be identified that hybridized with probes specific for the two proteins. Also, functional differences were noted since the mastocytoma enzyme, contrary to the liver enzyme, requires a polycation cofactor for expression of N-deacetylase activity. The results are discussed in relation to the structural properties of heparin and heparan sulfate.