The biosynthesis of the lipid-linked oligosaccharide substrate for N-linked protein glycosylation follows a highly conserved pathway at the membrane of the endoplasmic reticulum. Based on the synthetic growth defect in combination with a reduced oligosaccharyltransferase activity (wbp1), we have identified alg10 mutant strains which accumulate lipid-linked Glc2Man9GlcNAc2. We cloned the corresponding wild-type gene and show in a novel in vitro assay that Alg10p is a dolichyl-phosphoglucose-dependent glucosyltransferase which adds the terminal alpha-1,2 glucose to the lipid-linked Glc2Man9GlcNAc2 oligosaccharide. Hypoglycosylation of secreted proteins in alg10 deletion strains demonstrates that the terminal alpha-1,2-linked glucose residue is a key element in substrate recognition by the oligosaccharyltransferase. This ensures that primarily completely assembled oligosaccharide is transferred to protein.