The yeast lipin homolog Pah1p is a Mg2+‐dependent phosphatidate (PA) phosphatase enzyme. Gly80 that is found in the NLIP domain of Pah1p is conserved in mammalian lipin proteins. A spontaneous G84R mutation in lipin 1 causes lipodystrophy and fatty liver in the fld2J (fatty liver dystrophy) mouse at birth. To examine the importance of Gly80 to the enzymatic function of yeast Pah1p, we constructed a mutant PAH1HA allele that contained arginine in place of the conserved glycine residue. While the G80R mutation did not affect the expression of Pah1p in yeast (as determined by immunoblot analysis using anti‐HA antibodies), the mutation had a major effect on its phosphatidate phosphatase activity. The overexpression of the G80R mutant protein did not have a significant effect on the level of PA phosphatase activity in pah1Δ mutant cells when compared with cells that overexpressed the wild type PAH1HA allele. Moreover, an immune complex containing the G80R mutant protein that was isolated from pah1Δ cells expressing the G80R PAH1HA allele had essentially no PA phosphatase activity. A His6‐tagged G80R mutant protein was expressed and purified from E. coli. The Vmax of the G80R mutant enzyme was 56‐fold lower than that of the wild type enzyme. The G80R mutation also caused a 2.5‐fold increase in the cooperativity respect to PA, but little effect on the Km value for PA. Supported by NIH grant GM 28140.