We report the cloning and partial characterization of the fourth member of the vertebrate heparan sulfate/heparin: GlcNAc N-deacetylase/GlcN N-sulfotransferase family, which we designate NDST4. Full-length cDNA clones containing the entire coding region of 872 amino acids were obtained from human and mouse cDNA libraries. The deduced amino acid sequence of NDST4 showed high sequence identity to NDST1, NDST2, and NDST3 in both species. NDST4 maps to human chromosome 4q25-26, very close to NDST3, located at 4q26-27. These observations, taken together with phylogenetic data, suggest that the four NDSTs evolved from a common ancestral gene, which diverged to give rise to two subtypes, NDST3/4 and NDST1/2. Reverse transcription-polymerase chain reaction analysis of various mouse tissues revealed a restricted pattern of NDST4 mRNA expression when compared with NDST1 and NDST2, which are abundantly and ubiquitously expressed. Comparison of the enzymatic properties of the four murine NDSTs revealed striking differences in N-deacetylation and N-sulfation activities; NDST4 had weak deacetylase activity but high sulfotransferase, whereas NDST3 had the opposite properties. Molecular modeling of the sulfotransferase domains of the murine and human NDSTs showed varying surface charge distributions within the substrate binding cleft, suggesting that the differences in activity may reflect preferences for different substrates. An iterative model of heparan sulfate biosynthesis is suggested in which some NDST isozymes initiate the N-deacetylation and N-sulfation of the chains, whereas others bind to previously modified segments to fill in or extend the section of modified residues.