Lateral and transversal distribution of cholesterol ester hydrolase activity in rat liver microsomal membranes has been studied. Total cholesterol ester hydrolase activity was found predominantly (75%) in rough microsomes though specific esterase activities were similar in rough and smooth microsomal fractions. The transversal asymmetry of the enzyme was examined using the criteria of protease sensitivity and latency of mannose-6-phosphate phosphatase. Cholesterol ester hydrolase resulted drastically inhibited by proteolysis with trypsin when microsomal integrity had been previously disrupted with sodium deoxycholate or sodium taurocholate. Under these conditions, most lumenal mannose-6-phosphate phosphatase activity was destroyed. However, cholesterol esterase was unaffected by preincubating microsomes with the detergent alone, which led to the complete expression of latent mannose-6-phosphate phosphatase or by preincubating them with trypsin, where less than a 15% of the lumenal mannose-6-phosphate phosphatase was lost. These findings suggest that cholesterol ester hydrolase activity is located on the lumenal surface of the hepatic microsomal vesicles.