Mannosylphosphoryldolichol (Man-P-Dol):protein O-mannosyltransferase (PMT1) was solubilized by extracting a crude microsomal fraction from Saccharomyces cerevisiae with 1.2% Chaps-0.5% desoxycholate and purified 120-fold by standard chromatographic procedures. These very stable, partially purified preparations of PMT1 catalyzed the transfer of mannosyl units from exogenous Man-P-Dol to serine/threonine residues in the synthetic peptide acceptor, Tyr-Asn-Pro-Thr-Ser-Val-NH2, forming O-mannosidic linkages of the α-configuration. The specificity of yeast PMT1 was defined with respect to the recognition of the saturated α-isoprene unit, the chain length of the dolichyl moiety, and the anomeric configuration of the mannosyl-phosphoryl linkage of the lipophilic mannosyl donor. When Man-P-Dol95 and mannosylphosphorylpolyprenol (Man-P-Poly95), which contains a fully unsaturated polyprenyl chain, were compared as substrates, the initial rate for peptide mannosylation was dramatically higher with Man-P-Dol95 relative to Man-P-Pol95. The chain length of the dolichyl moiety also influenced the mannolipid-enzyme interaction as the partially purified PMT1 had a higher affinity for Man-P-Dol95 than for Man-P-Dol55. When β-ManP-Dol95 was compared with chemically synthesized α-Man-P-Dol95 as a mannosyl donor, a strict stereospecificity was observed for the presence of a β-mannosyl-phosphoryl linkage. In summary, a procedure for isolating a stable, partially purified preparation of PMT1 from S. cerevisiae is described. Enzymological studies with these preparations of PMT1 provide the first evidence that the recognition of the lipophilic mannosyl donor is stereospecific. These results also demonstrate that maximal O-mannosylation of serine/threonine residues in yeast glycoproteins catalyzed by the partially purified preparation of PMT1 requires the presence of a saturated α-isoprene unit in the dolichyl moiety of Man-P-Dol.