Carboxylester lipase obtained from pig pancreas is associated with fatty acid ethyl ester synthase as judged by their elution in the same fraction from a heparin-Sepharose column, coprecipitations by antibody against purified carboxylester lipase and identical profiles of inhibition by diisopropyl fluorophosphate. Only one polypeptide of molecular mass 74-kDa in purified carboxylester lipase was labeled by immunostaining and affinity labeling with [3H]diisopropyl fluorosphate. Bovine serum albumin decreased the fatty-acid-ethyl-ester-synthesizing activity in a concentration-dependent manner. On incubation of purified carboxylester lipase with trioleylglycerol in an ethanol/water mixture, fatty acid ethyl ester was formed in the presence of a high concentration of bovine serum albumin. The acyltransfer activities from trioleylglycerol to ethanol (ethanolysis) were approximately 25-30 times higher than the acyltransfer activities to water (hydrolysis). When cholesterol was used as an acceptor, acyltransfer activity from trioleylglycerol to cholesterol (cholesterolysis) was also observed. We propose the following mechanism of fatty acid ethyl ester formation from triacyl glycerol. The enzyme attacks triacyl glycerol forming an acyl-enzyme intermediate, and during the deacylation process, alcohol binds to fatty acid as an acceptor. These results suggest that during lipid (triacyl glycerol) degradation, carboxylester lipase contributes to non-oxidative ethanol metabolism in the intestinal lumen.