Streptomyces lavendulae H646-SY2 produces cholesterol esterase (CHE; EC 3.1.1.13) extracellularly. A genomic library of the strain, prepared in plasmid pUC119, was screened with probes based on the amino acid sequence of the protein. A plasmid, designated as pKX101 and identified by hybridization with the probes, contained a 2.7-kb insert from Streptomyces DNA. We determined the I7-N-terminal amino acid sequence of mature CHE and the nucleotide sequence of the 0.9-kb segment containing the CHE gene (che). We found that the N-terminal of the mature CHE was Ala(39) and an open reading frame consisting of 681 bp starts at ATG and ends at TGA, suggesting that a precursor and a mature CHE consist of 227 and 189 amino acids, with a calculated relative molecular mass of 24,362 and 20,650, respectively. The leader peptide extends over 38 amino acids and has the characteristics of a signal sequence, including basic amino acids near the N-terminus and a hydrophobic core near the signal cleavage site.