Mammalian protein N-glycosylation requires the transfer of an oligosaccharide containing 2 residues of N-acetylglucosamine, 9 residues of mannose and 3 residues of glucose (Glc3Man9 GlcNAc2) from Glc3Man9GlcNAc2-diphospho (PP)-dolichol (DLO) onto proteins in the endoplasmic reticulum (ER). Under some pathophysiological conditions, DLO biosynthesis is perturbed, and truncated DLO is hydrolyzed to yield oligosaccharyl phosphates (OSP) via unidentified mechanisms. DLO diphosphatase activity (DLODP) was described in vitro, but its characterization is hampered by a lack of convenient non-radioactive substrates. Our objective was to develop a fluorescence-based assay for DLO hydrolysis. Using a vancomycin-based solid-phase extraction procedure coupled with thin layer chromatography (TLC) and mass spectrometry, we demonstrate that mouse liver membrane extracts hydrolyze fluorescent bacterial lipid II (LII: GlcNAc-MurNAc(dansyl-pentapeptide)-PP-undecaprenol) to yield GlcNAc-MurNAc(dansyl-pentapeptide)-P (GM5P). GM5P production by solubilized liver microsomal proteins shows similar biochemical characteristics to those reported for human hepatocellular carcinoma HepG2 cell DLODP activity. To conclude, we show, for the first time, hydrolysis of lipid II by a eukaryotic enzyme. As LII and DLO are hydrolyzed by the same, or closely related, enzymes, fluorescent lipid II analogs are convenient non-radioactive substrates for investigating DLODP and DLODP-like activities.