Formation of fatty acid ethyl esters (FAEEs, catalyzed by FAEE synthase) has been implicated in the pathogenesis of chronic pancreatitis. In previous studies, we demonstrated that FAEE synthase, purified from rat liver microsomes, is identical to rat liver carboxylesterase (pI 6.1), and structurally and functionally different than that from pancreas. In this study, we purified and characterized rat pancreatic microsomal FAEE synthase, and determined its relationship with rat pancreatic cholesterol esterase (ChE). Since most of the serine esterases express p-nitrophenyl acetate (PNPA)-hydrolyzing activity as well as synthetic activity to form fatty acid esters or amides with a wide spectrum of alcohols and amines, respectively, we used PNPA-hydrolyzing activity to monitor the purification of FAEE synthase during various chromatographic purification steps. Synthesizing activity towards FAEEs, fatty acid methyl esters, and fatty acid anilides was measured only in the pooled fractions. At each step of purification (ammonium sulfate saturation, Q Sepharose XL, and heparin-agarose column chromatographies, and high performance liquid chromatography (anion exchange and gel filtration)) synthetic as well as hydrolytic activities copurified. Using ethanol, methanol, or aniline as substrates, the ester or anilide synthesizing activity of the purified protein was found to be 8709, 13000, and 2201 nmol/h/mg protein, respectively. The purified protein displayed a single band with an estimated molecular mass of approximately 68 kD upon SDS-PAGE under reduced denaturing conditions, cross-reacted with antisera against rat pancreatic ChE and showed 100% N-terminal sequence homology of the first 15 amino acids to that of rat pancreatic ChE. These results suggest that the purified protein has broad substrate specificity towards the conjugation of endogenous long chain fatty acids with substrates having hydroxyl and amino groups and is identical to ChE.