Hepatic lipase (HL) is a member of the lipoprotein lipase/pancreatic lipase gene family and is believed to function in processing of intermediate and high density lipoproteins. As a lipase, HL is presumed to have a lipid interfacial binding domain, distinct from the esterase catalytic site, orienting the enzyme at aqueous-lipid interfaces and resulting in activation of esterase activity. However, the structural domains responsible for these separate functions have not been identified. Amino acid sequence homology to serine proteases, thioesterases and other lipases, identified Ser147 of rat HL as part of a highly conserved element in an esterase gene family. In order to better define the function of this domain in HL, site-directed mutagenesis was utilized to produce mutant cDNAs with amino acid substitutions for Ser147, Ser133, or Ser228. Following injection of Xenopus oocytes with SP6 transcripts for normal or mutant HL, media from the oocytes were assayed for lipolytic activity and immunoprecipitable HL protein. Mutations of Ser133 and Ser228 produced no decrease in activity whereas the mutant protein in which Ser147 was replaced with glycine had little, if any activity against emulsified triolein substrates. Replacing HL Ser147 with glycine also resulted in a protein with little or no measurable activity for tributyrin, a substrate which does not provide a lipid interface. These results suggest that Ser147 in rat HL is either located at the catalytic site or is required for maintaining the structural integrity of the catalytic site.