Fatty acid ethyl esters (FAEE), esterification products of fatty acid and ethanol, have been implicated as mediators of ethanol-induced organ damage. To understand the molecular and cellular events in FAEE synthesis and secretion, we developed a system in which HepG2 cells synthesize and release FAEE into the culture medium upon incubation with ethanol. The synthesis of FAEE was observed within 5 min of the addition of ethanol, with a plateau for FAEE synthesis after 2 h of incubation. It was also observed that FAEE are synthesized by both a microsomal FAEE synthase, which preferentially uses fatty acyl-CoA as a substrate, and a cytosolic FAEE synthase, which accepts both unesterified fatty acid and fatty acyl-CoA as substrates with a slight preference for fatty acyl-CoA. Although the kinetics of cellular FAEE synthesis await further characterization, the intracellular fatty acid substrate appears to be derived principally from glycerolipids and other esters. FAEE were released into the culture medium by a mechanism independent of the vesicular transport pathway. Lipoprotein particles and albumin were found to be carriers of FAEE after FAEE secretion from the cell.-Kabakibi, A., C. R. Morse, and M. Laposata. Fatty acid ethyl esters and HepG2 cells: intracellular synthesis and release from the cells.