Production of acetyl esterase by Termitomyces clypeatus was stimulated by xylan, cellulose, arabinose and arabinose-containing polysaccharides in the growth medium. The culture filtrate was equally active with p-nitrophenyl acetate and acetyl xylan. Acetyl xylan was completely deacetylated by the enzyme. Activity was optimum at pH 6.5 and at 50 degrees C. The Km values for p-nitrophenyl acetate and acetyl xylan were 0.83 mM and 0.38% (w/v) with Vm of 48 and 55 mmole acetate produced/min.mg protein, respectively.