A new assay was developed to measure the N-deacetylase activity of the glucosaminyl N-deacetylase/N-sulfotransferases (NDSTs), which are key enzymes in sulfation of heparan sulfate (HS)/heparin. The assay is based on the recognition of NDST-generated N-unsubstituted glucosamine units in Escherichia coli K5 capsular polysaccharide or in HSs by monoclonal antibody JM-403. Substrate specificity and potential product inhibition of the NDST isoforms 1 and 2 were analyzed by comparing lysates of human 293 kidney cells stably transfected with mouse NDST-1 or -2. We found HSs to be excellent substrates for both NDST enzymes. Both NDST-1 and -2 N-deacetylate heparan sulfate from human aorta ( approximately 0.6 sulfate groups/disaccharide) with comparable high efficiency, apparent Km values of 0.35 and 0.76 microM (calculation based on [HexA]) being lower (representing a higher affinity) than those for K5 polysaccharide (13.3 and 4.7 microM, respectively). Comparison of various HS preparations and the unsulfated K5 polysaccharide as substrates indicate that both NDST-1 and -2 can differentially N-sulfate polysaccharides already modified to some extent by various other enzymes involved in HS/heparin synthesis. Both enzymes were equally inhibited by N-sulfated sequences (>or=6 sugar residues) present in N-sulfated K5, N-deacetylated N-resulfated HS, and heparin. Our primary findings were confirmed in the conventional N-deacetylase assay measuring the release of 3H-acetate of radiolabeled K5 or HS as substrates. We furthermore showed that NDST N-deacetylase activity in crude cell/tissue lysates can be partially blocked by endogenous HS/heparin. We speculate that in HS biosynthesis, some NDST variants initiate HS modification/sulfation reactions, whereas other (or the same) NDST isoforms later on fill in or extend already modified HS sequences.