Subtilisin hydrolysis of chicken liver fatty acid syntheiase yields polypeptides of molecular weights 220,000, 160,000 and 35,000. The larger peptides are further degraded to proteins of molecular weights 122,000 and 105,000. When 50% and 80% of the synthetase subunits are cleaved, there is a loss of 10% and 40% of fatty acid synthetase activity, respectively, indicating that proteolysis of the 240,000-mol. wt. subunit does not substantially affect palmitate synthesis provided that the component polypeptides remain associated with each other. Ammonium sulfate fractionation yields a fraction containing the palmitoyl thioesterase activity. Polyacrylamide gel electrophoresis of this fraction under both nondenaturing and denaturing conditions yields one band with an estimated molecular weight of 35,000. The isolated thioesterase is specific for palmitoyl and stearoyl thioesters (myristoyl-CoA is hydrolyzed at 15% the rate of palmitoyl-CoA). The enzyme is inhibited byN-ethylmaleimide and diisopropylfluorophosphate, suggesting that both an active -SH and -OH are involved in catalysis. However, preincubation of the thioesterase with decanoly-CoA protected the enzyme against inhibition by diisopropylfluorophosphate but not byN-ethylmaleimide, suggesting that an active OH (seryl or threonyl) is involved in the hydrolysis of the palmitoyl group. This active hydroxyl group is uniquely inhibited by diisopropylfluorophosphate, as evidenced by the incorporation of 2 mol of [32P]diisopropylfluorophosphate per mole of synthetase (M r = 480,000) and the fact that all the radioactivity was associated with the isolated thioesterase. These results indicate that there are two copies of the thioesterase per mole of synthetase or one copy of the enzyme per 240,000-mol. wt. subunit.