A neutral bile salt-dependent cholesteryl ester hydrolase (CEH) in rat liver has been shown to be indistinguishable from the pancreatic CEH by a number of criteria (Harrison, E. H. (1988) Biochim. Biophys. Acta 963, 28-34; Zolfaghari, R., Harrison, E. H., Ross, A. C., and Fisher, E. A. (1989) Proc. Natl. Acad. Sci. U.S.A. 86, 6913-6919; Camulli, E. D., Linke, M. J., Brockman, H. L., and Hui, D. Y. (1989) Biochim. Biophys. Acta 1005, 177-182). The rat hepatoma cell line Fu5AH, which lacks this particular CEH activity, was stably transfected with the cDNA of rat pancreatic CEH, and the effects on cholesterol and cholesteryl ester metabolism in clones with varying levels of CEH expression determined. In spite of significant amounts of intracellular enzyme protein demonstrated by Western blotting, in cell lysates there was a consistently low level of catalytic activity, and in cultured cells there was no evidence that CEH served as an effective intracellular cholesteryl ester hydrolase or synthase. In contrast, the catalytic activity of the secreted enzyme was relatively higher and there was a small, but significant, increase in the ability of high density lipoprotein (added to the medium) to promote the clearance of cholesteryl ester from cells secreting high levels of CEH. Overall, these results suggest that in the liver, intracellular CEH does not significantly affect the turnover of cholesteryl esters and warrant future studies focusing on the function of the secreted enzyme. For example, secreted CEH may modify lipoproteins and affect their interactions with cells.