We have previously reported the purification of a palmitoyl-protein thioesterase (PPT) from bovine brain that removes palmitate from Ha-Ras (Camp, L. A., and Hofmann, S. L. (1993) J. Biol. Chem. 268, 22566-22574). In the current paper, we have isolated bovine and rat cDNA clones encoding PPT. The deduced amino acid sequence of PPT predicts a protein of 306 amino acids that contains amino acid motifs characteristic of thioesterases: "Gly-X-Ser-X-Gly" positioned near the NH2 terminus and "Gly-Asp-His" positioned near the COOH terminus of the protein. The identity of the PPT cDNA was further confirmed by expression in simian COS cells and insect Sf9 cells. Comparison of the DNA and protein sequence data suggests that a hydrophobic NH2-terminal sequence of 27 amino acid residues is removed from the primary translation product. Furthermore, the recombinant protein and the native protein purified from bovine brain contain complex asparagine-linked oligosaccharides and a large proportion of the expressed PPT is secreted from COS and Sf9 cells. Thus, while the palmitoyl-protein thioesterase will deacylate intracellular palmitoylated proteins such as Ha-Ras and the alpha subunits of heterotrimeric G proteins, the physiologic substrates are likely to be externally oriented or secreted proteins.