A gene coding for a thermostable esterase was isolated by functional screening of Escherichia coli cells that had been transformed with fosmid environmental DNA libraries constructed with metagenomes from thermal environmental samples. The gene conferring esterase activity on E. coli grown on tributyrin agar was composed of 936 bp, corresponding to 311 amino acid residues with a molecular mass of 34 kDa. The enzyme showed significant amino acid similarity (64%) to the enzyme from a hyperthermophilic archaeon, Pyrobaculum calidifontis. An amino acid sequence comparison with other esterases and lipases revealed that the enzyme should be classified as a new member of the hormone-sensitive lipase family. The recombinant esterase that was overexpressed and purified from E. coli was active above 30 degrees C up to 95 degrees C and had a high thermal stability. It displayed a high degree of activity in a pH range of 5.5 to 7.5, with an optimal pH of approximately 6.0. The best substrate for the enzyme among the p-nitrophenyl esters (C(4) to C(16)) examined was p-nitrophenyl caproate (C(6)), and no lipolytic activity was observed with esters containing an acyl chain length of longer than 10 carbon atoms, indicating that the enzyme is an esterase and not a lipase.