Sulfated lipids, cholesterol sulfate (CS) and I3SO3-GalCer, are commonly present in the epithelia of the digestive tracts of pigs, humans, rabbits, and rats. CS was the only sulfated lipid in the esophageal epithelia of these mammals, and I3SO3-GalCer, together with CS, was detected in the epithelia of the gastrointestinal tracts, at a concentration higher than 0.05 micromol per gram of dry weight. Although no sulfated lipids were present in the pancreatic duct, they were found in relatively high concentrations in the duodenal, jejunal, and ileal epithelia. To elucidate the functional significance of sulfated lipids in the digestive tract, we determined the effect of CS and I3SO3-GalCer on the activities of pancreatic and Pseudomonas aeruginosa elastases and found that both characteristically inhibited the pancreatic elastase but not the P. aeruginosa elastase. Desulfation of CS and I3SO3-GalCer abolished their inhibitory activity, and other membrane constituents including free fatty acids, phospholipids, and gangliosides failed to inhibit pancreatic elastase. In addition, steroid sulfates, such as dehydroepiandrosterone sulfate and pregnenolone sulfate, did not exhibit any inhibitory activity toward pancreatic elastase, indicating that the sulfate group and a suitable hydrophobic side chain are required in the inhibition of elastase. Inhibition of elastase by sulfated lipids occurred in a dose-dependent manner, and the molar ratios of CS and I3SO3-GalCer to elastase at which the enzyme activity was inhibited to 50% of the maximum level were 6:1 and 9:1, respectively. CS-treated elastase had the same Km and a lower Vmax compared with the untreated enzyme, and sulfated lipids were observed to bind tightly to the enzyme, suggesting irreversible inhibition. Thus, CS and I3SO3-GalCer in the digestive tracts of mammals were shown to function as epithelial inhibitors of pancreatic elastase.