Rat adrenal cortical cells have been prepared by collagenase dissociation of trypsin-treated adrenal tissue. The content and compositions of cholesteryl ester, phospholipid, and triglyceride fatty acids compare favorably with those of undissociated rat adrenal tissue. During 2-hour control incubations of adrenal cortical cells, steroidogenesis was not detected, and the levels of sterol ester, phospholipid, and triglyceride fatty acids were not significantly altered. Incubations with adrenocorticotropic hormone (ACTH) resulted in coricosterone production and significant depletions of sterol ester and triglyceride fatty acids, but not of phospholipid fatty acids. Although all fatty acid esters of cholesterol were hydrolyzed under these conditions, the greatest contributions to the net decrease in sterol esters were by oleate, arachidonate, and adrenate. Incubations with dibutyryl cyclic adenosine monophosphate (0.5 mM) resulted in significantly greater levels of corticosterone production than did ACTH (250 muunits), but the effects on cellular lipids were comparable to those seen with the tropic hormone. This study represents the first demonstration of hormone-induced hydrolysis of sterol esters in an in vitro cell suspension system. The results are discussed with respect to hormone-sensitive sterol ester hydrolase of adrenal cortex, and to the role of endogenous cholesteryl esters in the steroidogenic pathway.