Infantile Batten disease is a severe neurodegenerative storage disorder caused by mutations in the human PPT1 (palmitoyl protein thioesterase 1) gene, which encodes a lysosomal hydrolase that removes fatty acids from lipid-modified proteins. PPT1 has orthologs in many species, including lower organisms and plants, but not in Saccharomyces cerevisiae. The fission yeast Schizosaccharomyces pombe contains a previously uncharacterized open reading frame (SPBC530.12c) that encodes the S. pombe Ppt1p ortholog fused in frame to a second enzyme that is highly similar to a previously cloned mouse dolichol pyrophosphatase (Dolpp1p). In the present study, we characterized this interesting gene (designated here as pdf1, for palmitoyl protein thioesterase-dolichol pyrophosphate phosphatase fusion 1) through deletion of the open reading frame and complementation by plasmids bearing mutations in various regions of the pdf1 sequence. Strains bearing a deletion of the entire pdf1 open reading frame are nonviable and are rescued by a pdf1 expression plasmid. Inactivating mutations in the Dolpp1p domain do not rescue the lethality, whereas mutations in the Ppt1p domain result in cells that are viable but abnormally sensitive to sodium orthovanadate and elevated extracellular pH. The latter phenotypes have been previously associated with class C and class D vacuolar protein sorting (vps) mutants and vacuolar membrane H(+)-ATPase (vma) mutants in S. cerevisiae. Importantly, the Ppt1p-deficient phenotype is complemented by the human PPT1 gene. These results indicate that the function of PPT1 has been widely conserved throughout evolution and that S. pombe may serve as a genetically tractable model for the study of human infantile Batten disease.