An esterase from the fungus Clonostachys compactiuscula selectively hydrolyzes lovastatin, a clinically useful antihypercholesterolemic agent. Lovastatin or lovastatin-related compounds were required to induce the activity of the lovastatin 8(prm1)-((alpha)-methylbutyryloxy) esterase. The 46-kDa esterase was purified from mycelial extracts by centrifugation and a single anion-exchange chromatographic separation. Maximal lovastatin esterase activity was found at pH 9.0 to 9.6 and at 25 to 30(deg)C. The addition of 5 to 20% methanol resulted in greater lovastatin hydrolysis, while the addition of other solvents (ethanol, isopropanol, butanol, ethyl acetate, isopropyl acetate, or tetrahydrofuran) decreased hydrolysis. Lovastatin was selectively hydrolyzed even in the presence of an excess of simvastatin, another antihypercholesterolemic agent that is structurally very similar to lovastatin. This lovastatin 8(prm1)-((alpha)-methylbutyryloxy) esterase can be used to prepare a core intermediate for the generation of novel antihypercholesterolemic agents or to purify simvastatin prepared by C methylation of the 2(S)-methylbutyryloxy side chain of lovastatin.