The presence and subcellular localization of UDP-Gal:glucosylceramide beta 1----4galactosyltransferase (GalT-2) was investigated in rat liver. For this purpose, purified Golgi apparatus, endoplasmic reticulum, and plasma membrane fractions were prepared from the liver and used as the enzyme source for detecting GalT-2. A pure Golgi apparatus, highly enriched in many glycosyltransferases, was the only fraction where GalT-2 was measurable. The reaction product formation rate under appropriate assay conditions, which requires high detergent concentration and Mn2+, was low but comparable with that of other glycosyltransferases. The product formation was stimulated by exogenously added acceptor GlcCer, donor UDP-Gal, and Golgi protein. The reaction product was a single spot that was identified by chromatographic behavior, sensitivity to beta-galactosidase, and permethylation studies as Gal beta 1----4Glc beta 1----1'Cer (lactosylceramide). A metabolic experiment, performed by determining the glycosphingolipids which became radioactive in the above subcellular fractions prepared from the liver of animals treated with glucose-labeled glucosylceramide, further indicated that the in vivo glycosylation of glucosylceramide takes place in the Golgi apparatus.