The realization that majority of microbes are not amenable to cultivation as isolates under laboratory conditions has led to the culture-independent metagenomic approach as a novel technique for novel biocatalyst discovery. A leachate fosmid shotgun metagenome library was constructed and subsequently screened for esterolytic activities on a tributyrin agar medium. Nucleotide sequencing and translational analysis of an esterase-positive fosmid clone led to the identification of a 1,281 bp esterase gene (estC) encoding a protein (EstC) of 427 aa with translated molecular weight of 46.3 kDa. The EstC primary structure contained a signal leader peptide (29 aa), which could be cleaved to form a mature protein of 398 aa with molecular weight 43.3 kDa. Homology searches revealed that EstC belonged to the family VIII esterases, which exploit a serine residue within the S-x-x-K motif as a catalytic nucleophile. Substrate specificity studies showed that EstC prefers short to medium acyl chain length of p-nitrophenyl esters, a characteristic typical of "true" carboxylesterases. Moreover, EstC represents the first member of the family VIII esterases with a leader peptide and a detectable promiscuous beta-lactam hydrolytic activity. Site-directed mutagenesis studies also revealed that in addition to Ser103 and Lys106 residues, the Tyr219 residue also plays a catalytic role in EstC. The organic solvent stability and the specificity towards esters of tertiary alcohols linalyl acetate (3,7-dimethyl-1,6-octadien-3-yl acetate) make EstC potentially useful in biocatalysis.