The plant acyl-acyl carrier protein (ACP) thioesterases (TEs) are of biochemical interest because of their roles in fatty acid synthesis and their utilities in the bioengineering of plant seed oils. When the FatB1 cDNA encoding a 12:0-ACP TE (Uc FatB1) from California bay, Umbellularia californica (Uc) was expressed in Escherichia coli and in developing oilseeds of the plants Arabidopsis thaliana and Brassica napus, large amounts of laurate (12:0) and small amounts of myristate (14:0) were accumulated. We have isolated a TE cDNA from camphor (Cinnamomum camphorum) (Cc) seeds that shares 92% amino acid identity with Uc FatB1. This TE, Cc FatB1, mainly hydrolyzes 14:0-ACP as shown by E. coli expression. We have investigated the roles of the N- and C-terminal regions in determining substrate specificity by constructing two chimeric enzymes, in which the N-terminal portion of one protein is fused to the C-terminal portion of the other. Our results show that the C-terminal two-thirds of the protein is critical for the specificity. By site-directed mutagenesis, we have replaced several amino acids in Uc FatB1 by using the Cc FatB1 sequence as a guide. A double mutant, which changes Met-197 to an Arg and Arg-199 to a His (M197R/R199H), turns Uc FatB1 into a 12:0/14:0 TE with equal preference for both substrates. Another mutation, T231K, by itself does not effect the specificity. However, when it is combined with the double mutant to generate a triple mutant (M197R/R199H/T231K), Uc FatB1 is converted to a 14:0-ACP TE. Expression of the double-mutant cDNA in E. coli K27, a strain deficient in fatty acid degradation, results in accumulation of similar amounts of 12:0 and 14:0. Meanwhile the E. coli expressing the triple-mutant cDNA produces predominantly 14:0 with very small amounts of 12:0. Kinetic studies indicate that both wild-type Uc FatB1 and the triple mutant have similar values of Km,app with respect to 14:0-ACP. Inhibitory studies also show that 12:0-ACP is a good competitive inhibitor with respect to 14:0-ACP in both the wild type and the triple mutant. These results imply that both 12:0- and 14:0-ACP can bind to the two proteins equally well, but in the case of the triple mutant, the hydrolysis of 12:0-ACP is severely impaired. The ability to modify TE specificity should allow the production of additional "designer oils" in genetically engineered plants.