We recently purified from rat liver microsomes a carboxylesterase, designated hydrolase B, that catalyzes the hydrolysis of para-nitrophenylacetate with low affinity (Km approximately 400 microM) and is relatively insensitive to the inhibitory effects of phenylmethylsulfonyl fluoride. A carboxylesterase with identical properties is also present in rat kidney microsomes, at levels comparable to those in liver microsomes. The kidney enzyme is immunochemically indistinguishable from hydrolase B by Western immunoblotting and Ouchterlony double diffusion analysis. This study describes the cloning and sequencing of hydrolase B. A 1809-base pair (bp) cDNA was isolated from a rat kidney cDNA library screened with antibody against hydrolase B. Screening the same cDNA library by two-step polymerase chain reaction with external and internal primers based on the sequence of the 1809-bp cDNA and a primer based on the sequence of the adjoining lambda gt11 arm yielded a 279-bp cDNA that overlapped by 179 bp with the 1809-bp-sequence. Together these two cDNAs spanned a 1909-bp sequence with an opening reading frame encoding 561 amino acids, which includes all 543 amino acid residues in the mature protein plus an 18-amino acid signal peptide at the N terminus. The mature protein encoded by this kidney cDNA matches perfectly the N-terminal amino acid sequence of purified hydrolase B for 30 amino acid residues, as determined by automated Edman degradation. The mature protein contains 5 cysteine residues, two potential N-linked glycosylation sites, and a C-terminal tetrapeptide (His-Asn-Glu-Leu) that matches the HXEL consensus sequence for retaining proteins in the lumen of the endoplasmic reticulum. Based on alignment of conserved amino acid sequences in several mammalian carboxylesterases, and based on the mechanism of catalysis of serine proteases, the catalytic triad in hydrolase B is apparently composed of the nucleophile Ser203, the basic amino acid His448, and the acidic amino acid Asp97 or Glu228. Northern blots probed with the 1809-bp cDNA identified high levels of a approximately 2-kilobase mRNA for hydrolase B in liver and kidney. Little or no mRNA for hydrolase B was detected in testis, lung, prostate, brain, and heart, which confirms the tissue distribution of hydrolase B based on catalytic activity and Western immunoblotting. Immunocytochemical studies established that hydrolase B is localized in the centrilobular region of the liver and in the proximal tubules of the kidney, where it presumably plays a role in the metabolism of xenobiotics and possibly endogenous lipids, although a precise physiological role for hydrolase B remains to be determined.