Long-chain fatty acid esters of 17 beta-estradiol and other steroid hormones, which are formed in hormone-sensitive tissues, can be regenerated to the free hormone by the action of an esterase present in the cytosol. This esterase has now been examined in bovine placenta cotyledons. Activity towards steroid fatty acid esters was accompanied by activity towards a diacylglycerol analogue and cholesteryl oleate. During purification procedures, the ratio of activities towards the diacylglycerol analogue and estradiol 17 beta-oleate remained approximately constant. Activity towards these two substrates was inhibited by increasing concentrations of HgCl2 and phenylmethanesulfonyl fluoride in a parallel manner. Upon treatment with [3H]diisopropyl fluorophosphate, a major labelled species of Mr approx. 84,000 was formed. Activation by ATP and the catalytic subunit of cAMP-dependent protein kinase occurred. These properties were very similar to those of the hormone-sensitive lipase of bovine adipose tissue previously reported and run in parallel in this study. A highly purified preparation of this latter enzyme was found to hydrolyse steroid fatty acid esters and relative activities towards such substrates, diacylglycerol analogue and cholesteryl oleate, were similar to the placenta esterase. When the two esterases were phosphorylated with [gamma-32P]ATP, a labelled species of Mr 84,000 was isolated in both cases by use of an antibody raised against purified hormone-sensitive lipase of bovine adipose tissue. It is concluded that hormone-sensitive lipase is very likely the enzyme responsible for hydrolysis of steroid fatty acid esters in bovine placenta and possibly steroid hormone target tissues in general.