Computer-based approaches identified PTE2 as a candidate human peroxisomal acyl-CoA thioesterase gene. The PTE2 gene product is highly similar to the rat cytosolic and mitochondrial thioesterases, CTE1 and MTE1, respectively, and terminates in a tripeptide sequence, serine-lysine-valine(COOH), that resembles the consensus sequence for type-1 peroxisomal targeting signals. PTE2 was targeted to peroxisomes and recombinant PTE2 showed intrinsic acyl-CoA thioesterase activity with a pH optimum of 8.5. A comparison of PTE2 and PTE1 thioesterase activities across multiple acyl-CoA substrates indicated that while PTE1 was most active on medium-chain acyl-CoAs, with little activity on long-chain acyl-CoAs, PTE2 displayed high activity on medium- and long-chain acyl-CoAs. The identification of PTE2 therefore offers an explanation for the observed long-chain acyl-CoA thioesterase activity of mammalian peroxisomes.