Triacylglycerol hydrolase is a microsomal enzyme that hydrolyzes stored cytoplasmic triacylglycerol in the liver and participates in the lipolysis/re-esterification cycle during the assembly of very-low-density lipoproteins. The structure-activity relationship of the enzyme was investigated by site-directed mutagenesis and heterologous expression. Expression of human TGH in Escherichia coli yields a protein without enzymatic activity, which suggests that posttranslational processing is necessary for the catalytic activity. Expression in baculovirus-infected Sf-9 cells resulted in correct processing of the N-terminal signal sequence and yielded a catalytically active enzyme. A putative catalytic triad consisting of a nucleophilic serine (S221), glutamic acid (E354), and histidine (H468) was identified. Site-directed mutagenesis of the residues (S221A, E354A, and H468A) yielded a catalytically inactive enzyme. CD spectra of purified mutant proteins were very similar to that of the wild-type enzyme, which suggests that the mutations did not affect folding. Human TGH was glycosylated in the insect cells. Mutagenesis of the putative N-glycosylation site (N79A) yielded an active nonglycosylated enzyme. Deletion of the putative C-terminal endoplasmic reticulum retrieval signal (HIEL) did not result in secretion of the mutant protein. A model of human TGH structure suggested a lipase alpha/beta hydrolase fold with a buried active site and two disulfide bridges (C87-C116 and C274-C285).