During the fermentation of sugars to ethanol relatively high levels of an undesirable coproduct, ethyl acetate, are also produced. With ethanologenic Escherichia coli strain KO11 as the biocatalyst, the level of ethyl acetate in beer containing 4.8% ethanol was 192 mg liter(-1). Although the E. coli genome encodes several proteins with esterase activity, neither wild-type strains nor KO11 contained significant ethyl acetate esterase activity. A simple method was developed to rapidly screen bacterial colonies for the presence of esterases which hydrolyze ethyl acetate based on pH change. This method allowed identification of Pseudomonas putida NRRL B-18435 as a source of this activity and the cloning of a new esterase gene, estZ. Recombinant EstZ esterase was purified to near homogeneity and characterized. It belongs to family IV of lipolytic enzymes and contains the conserved catalytic triad of serine, aspartic acid, and histidine. As expected, this serine esterase was inhibited by phenylmethylsulfonyl fluoride and the histidine reagent diethylpyrocarbonate. The native and subunit molecular weights of the recombinant protein were 36,000, indicating that the enzyme exists as a monomer. By using alpha-naphthyl acetate as a model substrate, optimal activity was observed at pH 7.5 and 40 degrees C. The Km and Vmax for alpha-naphthyl acetate were 18 microM and 48.1 micromol. min(-1). mg of protein(-1), respectively. Among the aliphatic esters tested, the highest activity was obtained with propyl acetate (96 micromol. min(-1). mg of protein(-1)), followed by ethyl acetate (66 micromol. min(-1). mg of protein(-1)). Expression of estZ in E. coli KO11 reduced the concentration of ethyl acetate in fermentation broth (4.8% ethanol) to less than 20 mg liter(-1).