Long-chain acyl-CoA thioesterases hydrolyze long-chain acyl-CoAs to the corresponding free fatty acid and CoASH and may therefore play important roles in regulation of lipid metabolism. We have recently cloned four members of a highly conserved acyl-CoA thioesterase multigene family expressed in cytosol (CTE-I), mitochondria (MTE-I), and peroxisomes (PTE-Ia and -Ib), all of which are regulated via the peroxisome proliferator-activated receptor alpha (Hunt, M. C., Nousiainen, S. E. B., Huttunen, M. K., Orii, K. E., Svensson, L. T., and Alexson, S. E. H. (1999) J. Biol. Chem. 274, 34317-34326). Sequence comparison revealed the presence of putative active-site serine motifs (GXSXG) in all four acyl-CoA thioesterases. In the present study we have expressed CTE-I in Escherichia coli and characterized the recombinant protein with respect to sensitivity to various amino acid reactive compounds. The recombinant CTE-I was inhibited by phenylmethylsulfonyl fluoride and diethyl pyrocarbonate, suggesting the involvement of serine and histidine residues for the activity. Extensive sequence analysis pinpointed Ser(232), Asp(324), and His(358) as the likely components of a catalytic triad, and site-directed mutagenesis verified the importance of these residues for the catalytic activity. A S232C mutant retained about 2% of the wild type activity and incubation with (14)C-palmitoyl-CoA strongly labeled this mutant protein, in contrast to wild-type enzyme, indicating that deacylation of the acyl-enzyme intermediate becomes rate-limiting in this mutant protein. These data are discussed in relation to the structure/function of acyl-CoA thioesterases versus acyltransferases. Furthermore, kinetic characterization of recombinant CTE-I showed that this enzyme appears to be a true acyl-CoA thioesterase being highly specific for C(12)-C(20) acyl-CoAs.