When Escherichia coli is grown on oleic acid as the sole carbon source, most of this fatty acid is completely degraded by beta-oxidation. However, approximately 10% of the oleic acid is only partially degraded to 3,5- cis-tetradecadienoyl-CoA, which is hydrolyzed to 3,5- cis-tetradecadienoic acid and released into the growth medium. An investigation of thioesterases involved in this novel pathway of beta-oxidation led to the identification of a new thioesterase (thioesterase III) that is induced by growth of E. coli on oleic acid. This enzyme was partially purified and identified as the ybaW gene product by mass spectrometric analysis of tryptic peptides. The ybaW gene, which has a putative consensus sequence for binding the fatty acid degradation repressor, was cloned and expressed in E. coli. Thioesterase III was shown to be a long-chain acyl-CoA thioesterase that is most active with 3,5-tetradecadienoyl-CoA, a minor metabolite of oleate beta-oxidation. Its substrate specificity and induction by fatty acids agree with its proposed function in the thioesterase-dependent pathway of beta-oxidation. Thioesterase III is proposed to hydrolyze metabolites of beta-oxidation that are resistant to further degradation and that would inhibit the flux through the pathway if they were allowed to accumulate.