A cholesteryl de-esterifying enzyme found in partially purified preparations of alpha toxin produced by the Wood 46 strain on Staphylococcus aureus has been separated from other staphylococcal proteins and from alpha toxin by isoelectric focusing and gel filtration. Preparations of alpha toxin from Bi-Gel P-60 columns and of the cholesteryl esterase from Bio-Gel P-200 columns showed a high degree of purity, as determined by analytical ultracentrifugation, gel diffusion, immunoelectrophoresis, and polyacrylamide gel electrophoresis. The molecular weight of the cholesteryl esterase determined by polyacrylamide gel electrophoresis in sodium dodecyl sulfate was 25,500 and on Bio-Gel P-300 columns it was 175,000, indicating an associating system. The density of the enzyme was lower than expected for simple proteins (about 1.19 g/ml). Chloroform-methanol extracts showed the presence of a neutral lipid that did not contain cholesterol. This material, possibly a glycolipid, might play a role in the stabilization of the enzymatically active protomer. The isoelectric point of the esterase was 9.1. Cholesteryl esterase was labile and lost its activity easily. It could bind reversibly to agarose-containing gels. After elution, it was enzymatically inactive, with an isoelectric point of less than 6.2. The W46M mutant of the Wood 46 strain, which does not produce alpha toxin, also does not produce cholesteryl esterase.