Peroxisomes are organelles that function in the beta-oxidation of long- and very long-chain acyl-CoAs, bile acid-CoA intermediates, prostaglandins, leukotrienes, thromboxanes, dicarboxylic fatty acids, pristanic acid, and xenobiotic carboxylic acids. The very long- and long-chain acyl-CoAs are mainly chain-shortened and then transported to mitochondria for further metabolism. We have now identified and characterized two peroxisomal acyl-CoA thioesterases, named PTE-Ia and PTE-Ic, that hydrolyze acyl-CoAs to the free fatty acid and coenzyme A. PTE-Ia and PTE-Ic show 82% sequence identity at the amino acid level, and a putative peroxisomal type 1 targeting signal of -AKL was identified at the carboxyl-terminal end of both proteins. Localization experiments using green fluorescent fusion protein showed PTE-Ia and PTE-Ic to be localized in peroxisomes. Despite their high level of sequence identity, we show that PTE-Ia is mainly active on long-chain acyl-CoAs, whereas PTE-Ic is mainly active on medium-chain acyl-CoAs. Lack of regulation of enzyme activity by free CoASH suggests that PTE-Ia and PTE-Ic regulate intraperoxisomal levels of acyl-CoA, and they may have a function in termination of beta-oxidation of fatty acids of different chain lengths. Tissue expression studies revealed that PTE-Ia is highly expressed in kidney, whereas PTE-Ic is most highly expressed in spleen, brain, testis, and proximal and distal intestine. Both PTE-Ia and PTE-Ic were highly up-regulated in mouse liver by treatment with the peroxisome proliferator WY-14,643 and by fasting in a peroxisome proliferator-activated receptor alpha-dependent manner. These data show that PTE-Ia and PTE-Ic have different functions based on different substrate specificities and tissue expression.