A high level of cholesterol esterase activity, comparable to that of hormone-sensitive triglyceridase, has been demonstrated in rad adipose tissue. Essentially all of the activity was in the isolated adipocytes, primarily in the 100,000 times g supernatant fraction of the adipocytes. Cholesterol esterase activity in the 100,000 times g supernatant fraction was increased 40 plus or minus 16% by incubation with ATP (0.5 mM), Mg-2+ (1.25 mM), and cyclic adenosine 3':5'-monophosphate (cyclic AMP) (10 muM), conditions which also activated hormone-sensitive triglyceridase. Protein kinase inhibitor (rabbit skeletal muscle) blocked activation, and activation was restored by the addition of excess protein kinase (bovine skeletal muscle). In extracts prepared from adipocytes first incubated for 5 min with 10 muM epinephrine and 1 mM theophylline, there was no cyclic AMP-dependent cholesterol esterase activation, implying that the enzyme had been activated by a similar mechanism in the intact cell. The physiological role of this high level of cholesterol esterase activity in adipose tissue is unclear. Its relationship to hormone-sensitive triglyceride lipase, with which it extensively co-fractionates, and its possible involvement in fat mobilization remain to be determined.