We have identified a carboxylesterase produced in liquid cultures of the thermophilic actinomycete Thermobifida fusca KW3 that were supplemented with poly(ethylene terephthalate) fibers. The enzyme hydrolyzed highly hydrophobic, synthetic cyclic poly(ethylene terephthalate) trimers with an optimal activity at 60A degrees C and a pH of 6. V (max) and K (m) values for the hydrolysis were 9.3 A mu mol(-1) min(-1) mg(-1) and 0.5 mM, respectively. The esterase showed high specificity towards short and middle chain-length fatty acyl esters of p-nitrophenol. The enzyme retained 37% of its activity after 96 h of incubation at 50A degrees C and a pH of 8. Enzyme inhibition studies and analysis of substitution mutants of the carboxylesterase revealed the typical catalytic mechanism of a serine hydrolase with a catalytic triad composed of serine, glutamic acid, and histidine.