Abstract Cholesterol esterase activity was estimated in homogenates of rat arterial wall using radioactive cholesteryl oleate incorporated into phospholipid vesicles as a substrate. The labeled oleic acid was separated from the ester by addition of mixture. Under these conditions, two pH optima were found at about 4.5 and 7.5. Most of the activities at pH 4.5 and 7.5 were found in the lysosomal and microsomal fraction, respectively. No enzyme activity was detected when the substrate vesicles were prepared with phosphatidylethanolamine or sphingomyelin, but the activity was higher when the substrate vesicles were prepared with phosphatidylserine and highest when they were prepared with phosphatidylcholine. The relationship between enzyme regulation and lipid deposition in the arterial wall is discussed.