Cholesteryl ester (CE) hydrolysis is the rate-limiting step in the removal of free cholesterol (FC) from macrophage foam cells, and several enzymes have been identified as intracellular CE hydrolases in human macrophages. We have previously reported the antiatherogenic role of a carboxylesterase [carboxylesterase 1 (CES1)], and the objective of the present study was to determine the contribution of CES1 to total CE hydrolytic activity in human macrophages. Two approaches, namely, immune depletion and short hairpin (sh)RNA-mediated knockdown, were used. Immuneprecipitation by a CES1-specific antibody resulted in a 70-80% decrease in enzyme activity, indicating that CES1 is responsible for >70% of the total CE hydrolytic activity. THP1-shRNA cells were generated by stably transfecting human THP1 cells with four different CES1-specific shRNA vectors. Despite a significant (>90%) reduction in CES1 expression both at the mRNA and protein levels, CES1 knockdown neither decreased intracellular CE hydrolysis nor decreased FC efflux. Examination of the underlying mechanisms for the observed lack of effects of CES1 knockdown revealed a compensatory increase in the expression of a novel CES, CES3, which is only expressed at <30% of the level of CES1 in human macrophages. Transient overexpression of CES3 led to an increase in CE hydrolytic activity, mobilization of intracellular lipid droplets, and a reduction in cellular CE content, establishing CES3 as a bona fide CE hydrolase. This study provides the first evidence of functional compensation whereby increased expression of CES3 restores intracellular CE hydrolytic activity and FC efflux in CES1-deficient cells. Furthermore, these data support the concept that intracellular CE hydrolysis is a multienzyme process.