The synthesis of the major linkage found in yeast cell wall structural polysaccharides, glucosyl-beta-(1 leads to 3)-glucosyl, was studied with a membrane preparation from Saccharomyces cerevisiae. The sugar donor was UDP-glucose, and the reaction required addition of glycerol bovine serum albumin, and ATP or GTP for maximal activity. Under optimal conditions, extremely efficient glucose transfer was obtained, with 20 to 50% of the substrate utilized in 20 min at 30 degrees C. The polysaccharide formed in the reaction was insoluble in water and soluble in alkali; it was characterized enzymatically and chemically as a beta-(1 leads to 3)-linked linear glucan of chain length 60 to 80. The terminal reducing group was found to be labeled with 14C, as was the substrate used; therefore, the polysaccharide is synthesized de novo. For each glucosyl group transferred, one equivalent of UDP was formed. No evidence was found for a lipid-linked intermediate. When yeast protoplast lysates were subjected to fractionation by centrifugation in Renografin gradients, glucan synthetase was found in the plasma membrane fraction, with the same distribution and sidedness as chitin synthetase. Because of the spatially restricted growth of the cell wall during cell division in budding yeasts, this result suggests localized and reversible activation of the enzyme during the cell cycle.