The O-antigen of lipopolysaccharide in Gram-negative bacteria plays an important role in bacterium-host interactions. Escherichia coli O86:B7 O-unit contains five sugar residues: one fucose (Fuc) and two each of N-acetylgalactosamine (GalNAc) and galactose (Gal). The entire O-antigen gene cluster was previously sequenced: orf1 was assigned the gne gene for the biosynthesis of UDP-GalNAc. To confirm this annotation, overexpression, purification, and biochemical characterization of Gne were performed. By using capillary electrophoresis, we showed that Gne can catalyze the interconversion of both UDP-GlcNAc/GalNAc and UDP-Glc/Gal almost equally well. The Km values of Gne for UDP-Glc, UDP-Gal, UDP-GlcNAc, and UDP-GalNAc are 370, 295, 323, and 373 microM, respectively. The comparison of kinetic parameters of Gne from Escherichia coli O86:B7 to those of other characterized UDP-GlcNAc/Glc 4-epimerases indicated that it has relaxed specificity toward the four substrates, the first characterized enzyme to have this activity in the O-antigen biosynthesis. Moreover, the calculated kcat/Km values for UDP-GalNAc and UDP-Gal are approximately 2-4 times higher than those for UDP-GlcNAc and UDP-Glc, suggesting that Gne is slightly more efficient for the epimerization of UDP-GalNAc and UDP-Gal. One mutation (S306Y) resulted in a loss of epimerase activity for non-acetylated substrates by about 5-fold but totally abolished the activity for N-acetylated substrates, indicating that residue S306 plays an important role in the determination of substrate specificity.