Acyl-CoA:diacylglycerol acyltransferase (EC 2.3.1.20, DGAT or DAGAT), which catalyzes the final step in triacylglycerol biosynthesis, has at least two discrete family members (DGAT1 and DGAT2) with different physiological roles. Here we report a systematic study of the local functional and structural role of seven cysteine residues present in DGAT2 from Saccharomyces cerevisiae (ScDGAT2, also known as Dga1p) using chemical modification in combination with site-directed mutagenesis. We demonstrate that although DGAT2 was susceptible to various thiol-modifying reagents, none of the cysteines were directly involved in the catalytic activity. Analysis of the accessibility of the sulfhydryl groups revealed that cysteines are also not involved in formation of intramolecular disulfide linkages. Inhibition of DGAT activity with thiol-specific reagents was localized to cysteine 314, which was found to be in the proximity of a highly conserved motif of DGAT2. Our work indicates that although this cysteine does not play a role in enzymatic catalysis, it may reside in a crucial position that is near a possible active site of DGAT2 or related to proper folding of the protein.