A new esterase gene from Xanthomonas vesicatoria (formerly X. campestris) DSM 50861 was identified, cloned from a chromosomal gene library and overexpressed in Escherichia coli. The corresponding DNA fragment contains an ORF of 1,818 bp, encoding a hydrolase of the GDSL esterase family. A protein of about 67 kDa, named Xv_EstE, was expressed from this fragment. A N-terminal signal peptide was processed under low-expression conditions, yielding a 63-kDa mature protein. The predicted amino acid sequence showed distinct homology to esterases of the GDSL family. Based on homology, a catalytic triad Gly-Asp-Ser could be defined. Amino acid sequence alignments and computer-assisted structure prediction indicated the presence of a carboxyl-terminal P-barrel membrane domain which might facilitate binding of Xv_EstE to the outer membrane. This could be verified by differential cell fractionation experiments, in which Xv_EstE was exclusively found in the outer membrane fraction. Xv_EstE showed preferential hydrolytic activity on short chain (up to C-8) and para-substituted nitrophenylesters as substrates. However, only long-chain 1-hydroxy-pyrene-3,6,8-trisulfonic acid (HPTS)-fatty acid esters were hydrolyzed. Xv_EstE was also found to be active on a series of substrates of industrial interest, such as 1-methylprop-2-ynyl acetate, for which an enantioselectivity up to 93% ee could be recognized.