Infantile neuronal ceroid lipofuscinosis (INCL) is a neurodegenerative lysosomal storage disease that results from a deficiency of palmitoyl protein thioesterase (PPT), a deacylating enzyme that removes cysteine-bound palmitate from proteins. We developed an in vitro PPT enzyme assay that can be readily used for the clinical diagnosis of both INCL patients and carriers. The substrate is a palmitoylated peptide (IRY[14C]palmitoyl-CWLRR) synthesized by reacting [14C] palmitoyl-CoA with a synthetic octapeptide from the PNS P0 glycoprotein. The PPT assay performed in immortalized lymphoblastoid B-cells or the postmortem brain homogenate showed the optimal enzyme activity at pH 5.0, consistent with the findings that PPT is a lysosomal enzyme. PPT activity in lymphoblasts from INCL patients was <4% of that of control lymphoblasts. In addition, obligatory carriers showed 74% of the control activity. Other pathological controls, including the juvenile form of NCL, showed PPT activities that were not different from normal. Furthermore, one brain sample from an INCL patient contained only 7% PPT activity when compared with an unaffected brain. Thus, the enzyme activity assay gives a confident diagnosis of INCL. In contrast, when the total RNA extract from lymphoblasts was probed with 32P-labeled PPT by northern blot analysis, the level of transcript varied among independent INCL families and was not related to PPT activity. In conclusion, whereas variant genetic modifications result in PPT deficiency, all giving similar INCL phenotype, both affected patients and heterozygote carriers can now be screened with a reliable in vitro PPT assay.