Ether glycerolipids of Leishmania major are important membrane components as well as building blocks of various virulence factors. In L. major, the first enzyme of the ether glycerolipid biosynthetic pathway, LmDAT, is an unusual, glycosomal dihydroxyacetonephosphate acyltransferase important for parasite's growth and survival during the stationary phase, synthesis of ether lipids, and virulence. The present work extends our knowledge of this important biosynthetic enzyme in parasite biology. Site-directed mutagenesis of LmDAT demonstrated that an active enzyme was critical for normal growth and survival during the stationary phase. Deletion analyses showed that the large N-terminal extension of this initial acyltransferase may be important for its stability or activity. Further, abrogation of the C-terminal glycosomal targeting signal sequence of LmDAT led to extraglycosomal localization, did not impair its enzymatic activity but affected synthesis of the ether glycerolipid-based virulence factor lipophosphoglycan. In addition, expression of this recombinant form of LmDAT in a null mutant of LmDAT did not restore normal growth and survival during the stationary phase. These results emphasize the importance of this enzyme's compartmentalization in the glycosome for the generation of lipophosphoglycan and parasite's biology.