Distribution of cholesterol ester hydrolase (EC 3.1.1.13) activity was examined with about 500 strains of bacteria, Actinomycetes, yeasts, molds, and Basidiomycetes. Of these microorganisms, Pseudomonas fluorescens ATCC 21156 showed the highest activity of chole sterol ester hydrolase in the culture fluid. Cultural conditions for the formation of the enzyme by Pseudomonas fluorescens were investigated. Soybean meal was essential for the enzyme formation. Addition of soybean oil brought about good cell growth and a remarkable increase in the enzyme formation. The production medium was composed of soybean meal 2%, soybean oil 0.5%, glucose 0.5%, urea 0.2%, K2HP04 0.1%, KCI 0.05%, and MgSO4. 7H20 0.05%, pH 7.5. The enzyme activity appeared in the culture broth at the early logarithmic phase, paralleled the increase in growth and reached a maximum at the early stationary phase. The assay of cholesterol ester hydrolase was based on the formation of a quinoneimine dye in the coupled reactions with cholesterol oxidase and peroxidase according to some modi fications of the method of Allain et al.1)