A homgenate of Saccharomyces cerevisiae grown under semi-anaerobic as well as aerobic conditions was found to catalyze the hydrolysis of fatty acid esters of sterols in the presence of Triton X-100. The enzyme levels in cells grown under various conditions were similar and the enzyme had a broad substrate specificity for sterol esters. The enzyme was localized in the mitochondrial fraction for the aerobically grown cells and in the mitochondrial and cytosolic fractions for the semi-anaerobically grown cells.