A gene-specific, metagenomic PCR method has led to the discovery of a novel esterase subfamily consisting of five homologous members. Sequence analysis of this esterase subfamily, named the ArmEst subfamily, revealed a unique conserved pattern with a significant variable interior sequence flanked by two symmetric and identical long arm sequences. The two homologous long arm sequences had 100 % sequence identity and symmetry at both ends between the five members of this esterase class, but only 17-58 % identity was shared for the internal sequence. The biochemical properties of two of the ArmEst esterases definitively demonstrated that they are true active esterases rather than pseudogenes. This is the first report presenting an esterase subfamily containing a unique arm sequence, indicating a rare homologous recombination occurring in the coding area of a functional gene to generate their functional diversity.