An assay for ovine luteal cholesterol esterase is described which measures the liberation of tritiated cholesterol from cholesterol oleate. The enzyme displayed a pH optimum near 7.0 and was sensitive to ionic strength. When luteal tissue was fractionated by differential centrifugation, 64% of the activity was recovered from the soluble fraction while 23% of the activity was in the microsomal fraction. The Michaelis constant for the enzyme was estimated at 3.0x10 -4 M. The activity of the enzyme was enhanced 2-fold by adenosine triphosphate (ATP), Mg ++, and N 6,O 2'-dibutyryl adenosine 3':5'-cyclic monophosphate [(Bt) 2cAMP]. A phosphodiesterase inhibitor, 1-methyl-3-isobutylxanthine (MIX), increased the activity of the enzyme 4-fold. In addition, luteal slices stimulated by luteinizing hormone (LH) or (Bt) 2cAMP responded with an increased enzyme activity and progesterone secretion. The activity of luteal cholesterol esterase correlated well with progesterone secretion on Days 2-14 of the estrous cycle. However, during normal and prostaglandin-induced luteal regression, the cholesterol esterase activity increased while progesterone secretion declined dramatically. This increased esterase activity probably represented a general increase in autolytic enzymes during luteolysis. During early pregnancy (Days 12-20), cholesterol esterase activity rose gradually while luteal weight and luteal and serum concentrations of progesterone remained constant. In general, cholesterol esterase activity in the ovine corpus luteum was correlated with progesterone secretion.