In analyzing the sequence tags for mutant mouse embryonic stem (ES) cell lines in BayGenomics (a mouse gene-trapping resource), we identified a novel gene, 1-acylglycerol-3-phosphate O-acyltransferase (Agpat6), with sequence similarities to previously characterized glycerolipid acyltransferases. Agpat6's closest family member is another novel gene that we have provisionally designated Agpat8. Both Agpat6 and Agpat8 are conserved from plants, nematodes, and flies to mammals. AGPAT6, which is predicted to contain multiple membrane-spanning helices, is found exclusively within the endoplasmic reticulum (ER) in mammalian cells. To gain insights into the in vivo importance of Agpat6, we used the Agpat6 ES cell line from BayGenomics to create Agpat6-deficient (Agpat6-/-) mice. Agpat6-/- mice lacked full-length Agpat6 transcripts, as judged by northern blots. One of the most striking phenotypes of Agpat6-/- mice was a defect in lactation. Pups nursed by Agpat6-/- mothers die perinatally. Normally, Agpat6 is expressed at high levels in the mammary epithelium of breast tissue, but not in the surrounding adipose tissue. Histological studies revealed that the aveoli and ducts of Agpat6-/- lactating mammary glands were underdeveloped, and there was a dramatic decrease in the size and number of lipid droplets within mammary epithelial cells and ducts. Also, the milk from Agpat6-/- mice was markedly depleted in diacylglycerols and triacylglycerols. Thus, we identified a novel glycerolipid acyltransferase of the ER, AGPAT6, which is crucial for the production of milk fat by the mammary gland.