Acetylcholinesterase (AChE) and butyrylcholinesterase (BChE) are thought to be the result of a gene duplication event early in vertebrate evolution. To learn more about the evolution of these enzymes, we expressed in vitro, characterized, and modeled a recombinant cholinesterase (ChE) from a teleost, the medaka Oryzias latipes. In addition to AChE, O. latipes has a ChE that is different from either vertebrate AChE or BChE, which we are classifying as an atypical BChE, and which may resemble a transitional form between the two. Of the fourteen aromatic amino acids in the catalytic gorge of vertebrate AChE, ten are conserved in the atypical BChE of O. latipes; by contrast, only eight are conserved in vertebrate BChE. Notably, the atypical BChE has one phenylalanine in its acyl pocket, while AChE has two and BChE none. These substitutions could account for the intermediate nature of this atypical BChE. Molecular modeling supports this proposal. The atypical BChE hydrolyzes acetylthiocholine (ATCh) and propionylthiocholine (PTCh) preferentially but butyrylthiocholine (BTCh) to a considerable extent, which is different from the substrate specificity of AChE or BChE. The enzyme shows substrate inhibition with the two smaller substrates but not with the larger substrate BTCh. In comparison, AChE exhibits substrate inhibition, while BChE does not, but may instead show substrate activation. The atypical BChE from O. latipes also shows a mixed pattern of inhibition. It is effectively inhibited by physostigmine, typical of all ChEs. However, although the atypical BChE is efficiently inhibited by the BChE-specific inhibitor ethopropazine, it is not by another BChE inhibitor, iso-OMPA, nor by the AChE-specific inhibitor BW284c51. The atypical BChE is found as a glycophosphatidylinositol-anchored (GPI-anchored) amphiphilic dimer (G2
a), which is unusual for any BChE. We classify the enzyme as an atypical BChE and discuss its implications for the evolution of AChE and BChE and for ecotoxicology.