Pancreatic lipase (triacylglycerol acyl hydrolase) fulfills a key function in dietary fat absorption by hydrolysing triglycerides into diglycerides and subsequently into monoglycerides and free fatty acids. We have determined the three-dimensional structure of the human enzyme, a single-chain glycoprotein of 449 amino acids, by X-ray crystallography and established its primary structure by sequencing complementary DNA clones. Enzymatic activity is lost after chemical modification of Ser 152 in the porcine enzyme, indicating that this residue is essential in catalysis, but other data are more consistent with a function in interfacial recognition. Our structural results are evidence that Ser 152 is the nucleophilic residue essential for catalysis. It is located in the larger N-terminal domain at the C-terminal edge of a doubly wound parallel beta-sheet and is part of an Asp-His-Ser triad, which is chemically analogous to, but structurally different from, that in the serine proteases. This putative hydrolytic site is covered by a surface loop and is therefore inaccessible to solvent. Interfacial activation, a characteristic property of lipolytic enzymes acting on water-insoluble substrates at water-lipid interfaces, probably involves a reorientation of this flap, not only in pancreatic lipases but also in the homologous hepatic and lipoprotein lipases.