N-linked glycosylation requires the synthesis of an evolutionarily conserved lipid-linked oligosaccharide (LLO) precursor that is essential for glycoprotein folding and stability. Despite intense research, several of the enzymes required for LLO synthesis have not yet been identified. Here we show that two poorly characterized yeast proteins known to be required for the synthesis of the LLO precursor, GlcNAc2-PP-dolichol, interact to form an unusual hetero-oligomeric UDP-GlcNAc transferase. Alg13 contains a predicted catalytic domain, but lacks any membrane-spanning domains. Alg14 spans the membrane but lacks any sequences predicted to play a direct role in sugar catalysis. We show that Alg14 functions as a membrane anchor that recruits Alg13 to the cytosolic face of the ER, where catalysis of GlcNAc2-PP-dol occurs. Alg13 and Alg14 physically interact and under normal conditions, are associated with the ER membrane. Overexpression of Alg13 leads to its cytosolic partitioning, as does reduction of Alg14 levels. Concomitant Alg14 overproduction suppresses this cytosolic partitioning of Alg13, demonstrating that Alg14 is both necessary and sufficient for the ER localization of Alg13. Further evidence for the functional relevance of this interaction comes from our demonstration that the human ALG13 and ALG14 orthologues fail to pair with their yeast partners, but when co-expressed in yeast can functionally complement the loss of either ALG13 or ALG14. These results demonstrate that this novel UDP-GlcNAc transferase is a unique eukaryotic ER glycosyltransferase that is comprised of at least two functional polypeptides, one that functions in catalysis and the other as a membrane anchor.