The rat pancreatic cholesterol esterase is a 74,000 molecular weight protein encoded by a gene with 10 introns and 11 exons. The last exon of the cholesterol esterase gene is the largest and is also the least conserved exon among the cholesterol esterase genes of various species. The current study investigates the functional role of the exon 11 domain in rat cholesterol esterase. The transfection of native cholesterol esterase cDNA into COS cells resulted in an enzymatically active cholesterol esterase that was secreted by the cells. In contrast, transfection of cholesterol esterase cDNA with 88% of the exon 11 residues deleted from the sequence resulted in a protein that was not secreted by the cells. The cholesterol esterase with deletions in the exon 11 domain retained the ability to bind bile salt but was found to be enzymatically inactive. The inefficient secretion and the loss of enzyme activity for the truncated protein were not due to deletion of the proline-rich repeating units located in the exon 11 domain at the carboxyl terminus of the cholesterol esterase. The expression of rat cholesterol esterase with zero or one proline-rich units resulted in a truncated protein that was secreted by the transfected COS cells. The cholesterol esterases with reducing numbers of the proline-rich repeating units were also active in hydrolyzing p-nitrophenyl butyrate and cholesteryl oleate. The cholesterol esterase with fewer proline-rich repeating units were more active than the native enzyme in substrate hydrolysis at low bile salt concentrations.(ABSTRACT TRUNCATED AT 250 WORDS)