Lysosomal acid cholesteryl ester hydrolase (acid CEH, EC. 1.1.1.13) activity was inhibited by addition of an increasing amount of d = 1.21 bottom fraction from rat serum (Lipids in press). To clarify the mechanism of this inhibition, rat native and modified albumin were added to the assay mixture and their effects on acid CEH activity were examined. The inhibitory effect on acid CEH activity was dependent on the concentration of rat albumin. Albumin of various mammalian species, including human, bovine and rabbit, also inhibited acid CEH activity. This inhibitory activity was markedly increased by heat treatment, the effect increasing in parallel with the prolongation of the treatment. Moreover, this albumin-dependent inhibition of acid CEH activity was also markedly increased by methylation of albumin. In contrast, the inhibition of acid CEH activity by modified albumins, such as acetyl albumin, succinyl albumin and glycine methyl ester albumin, was much lower than that of albumin, and no stimulatory effect of heat treatment on the albumins was observed. The heat-treated albumin-dependent inhibition of acid CEH activity was not abolished in the presence of sodium deoxycholate. The values of Vmax obtained were similar with or without heat-treated albumin. These results suggest that the inhibitory effects of heat-treated albumin may be due to an intrinsic and characteristic property of the lipid/water interface, and that the stimulatory effects of heat treatment on albumin-dependent inhibition may be due to heat-induced changes in the affinity and conformation of albumin.