Substrate specificity of a purified acetylxylan esterase from Schizophyllum commune was investigated on a variety of methyl per-O-acetyl glycopyranosides, methyl di-O-acetyl-beta-D-xylopyranosides and acetylated polysaccharides. The enzyme preferentially deacetylated the 3-position of methyl 2,3,4-tri-O-acetyl-beta-D-xylopyranoside and 2,3,4,6-tetra-O-acetyl-beta-D-glucopyranoside. Removal of the 3-acetyl group from the xylopyranoside was accompanied by a slower deacetylation at positions 2 and 4. A similarly slower, accompanying deacetylation occurred primarily at position 2 with the glucopyranoside. Such specificity corresponds well to the expected function of the esterase in acetylxylan degradation. Of the three possible diacetates of methyl beta-D-xylopyranoside, the 3,4-diacetate was found to be the most rapidly deacetylated. Unexpectedly, products of its deacetylation were a mixture of 2- and 4-monoacetate. The formation of the methyl 2-O-acetyl-beta-D-xylopyranoside involved an enzyme-mediated acetyl group transfer because the rate of the enzyme-catalyzed reaction exceeded the rate of spontaneous migration of acetyl groups. This is the likely mechanism for acetyl removal from position 2 in the native substrate. The enzyme exhibited the highest regioselectivity with methyl 2,3,4,6-tetra-O-acetyl-beta-D-mannopyranoside. An 80% conversion of this substrate to methyl 4,6-di-O-acetyl-beta-D-mannopyranoside, a new mannose derivative, was achieved. In contrast to the majority of lipases and esterases exploited for regioselective deacetylation, the S. commune acetylxylan esterase did not attack the C-6 acetyl linkages in methyl hexopyranosides when other acetyl groups were available.