This report assesses the value of cholinesterase (ChE) activity as an indicator of liver function and analyses its usefulness in the diagnosis of jaundice. A rapid method of determination has been used, and alterations in ChE activity in conditions other than liver disease have been studied to permit a fuller and more accurate survey of its value as a liver function test. The level of serum cholinesterase activity remains constant under normal circumstances, and follows the pattern of protein metabolism, falling in catabolism and rising in anabolism.In hepatocellular disease cholinesterase activity is lowered. Very low levels in cirrhosis with jaundice indicate a grave prognosis. Normal levels are usual in post-hepatic jaundice unless complicating factors are present, such as cholangitis or liver metastases. Serum cholinesterase is useful both as a liver function test and in the diagnosis of jaundice provided consideration is given to the other factors which affect the level of activity of the enzyme.