Essential protein. Removes thioester-linked fatty acyl groups such as palmitate from modified cysteine residues in proteins or peptides during vacuolar degradation. Required for efficient N-glycosylation. Necessary for maintaining optimal levels of dolichol-linked oligosaccharides. H2O + S-hexadecanoyl-L-cysteinyl-[protein] = H(+) + hexadecanoate + L-cysteinyl-[protein] a dolichyl diphosphate + H2O = a dolichyl phosphate + H(+) + phosphate Proteolytically cleaved, possibly by krp1. Cells show lethality and the dolichyldiphosphatase domain alone can rescue the lethal phenotype, but the growth rate of these cells is slower than in wild-type cells. Cells containing wild-type palmitoyl-protein thioesterase (PPT) and inactivated dolichyldiphosphatase reverse the growth retardation phenotype. Cells containing no functional copy of palmitoyl-protein thioesterase are viable, but abnormally sensitive to sodium orthovanadate and elevated external pH. These sensitivities are reversed when the cells are transformed with plasmid containing wild-type PPT and an inactivating mutation in the dolichyldiphosphatase domain. In the N-terminal section; belongs to the palmitoyl-protein thioesterase family. In the C-terminal section; belongs to the dolichyldiphosphatase family.