An extracellular esterase was isolated from the brewer's yeast, Saccharomyces carlsbergensis. Inhibition by diisopropyl fluorophosphate shows that the enzyme has a serine active site. By mass spectrometry, the molecular weight of the enzyme was 16.9 kDa. The optimal pH for activity was in the range of four to five. Esterase activity was found in beer before pasteurization, and a low level of activity was still present after pasteurization. Caprylic acid, which is present in beer, competitively inhibited the esterase. The substrate preference towards esters of p-nitrophenol indicated that the enzyme prefers esters of fatty acids from four to 16 carbon atoms. The esterase has lipolytical activity; olive oil (C-18:1), which is a classical substrate for lipase, was hydrolysed. N-terminal sequence analysis of the esterase yielded a sequence which was identical to the deduced amino acid sequence of the S. cerevisiae TIP1 gene. The esterase preparation did not appear to contain significant amounts of other proteins than Tip1p, indicating that the TIP1 gene is the structural gene for the esterase.