The UbiA superfamily of intramembrane prenyltransferases catalyzes an isoprenyl transfer reaction in the biosynthesis of lipophilic compounds involved in cellular physiological processes. Digeranylgeranylglyceryl phosphate (DGGGP) synthase (DGGGPase) generates unique membrane core lipids for the formation of the ether bond between the glycerol moiety and the alkyl chains in archaea and has been confirmed to be a member of the UbiA superfamily. Here, the crystal structure is reported to exhibit nine transmembrane helices along with a large lateral opening covered by a cytosolic cap domain and a unique substrate-binding central cavity. Notably, the lipid-bound states of this enzyme demonstrate that the putative substrate-binding pocket is occupied by the lipidic molecules used for crystallization, indicating the binding mode of hydrophobic substrates. Collectively, these structural and functional studies provide not only an understanding of lipid biosynthesis by substrate-specific lipid-modifying enzymes but also insights into the mechanisms of lipid membrane remodeling and adaptation.