Microsomal acyl coenzyme A:cholesterol acyltransferase activity of rat intestinal mucosa was measured as the incorporation of [1-14C]oleic acid into cholesterol esters. Exogenous cholesterol and sterol carrier protein singly and together extended the time over which the reaction rate was linear. Cholesterol esterification was suppressed by 2-monooleoyl glyceryl ether a 2-monoglyceride analog and potential substrate, but was unaltered by alpha-glycerophosphate or lysolecithin. Esterifying activity was lowest in microsomes from the intestinal segment 0-15 cm distal to the pylorus and highest in microsomes from the 30- to 45-cm segment. The total and specific activities of acyl coenzyme A:cholesterol acyltransferase were highest in cells isolated from the crypt zones. The location and level of activity were unaffected by diversion of either pancreatic juice or pancreatic juice and bile from the intestinal lumen. These findings question the physiological significance of acyl coenzyme A:cholesterol acyl transferase in the regulation of the absorption of exogenous cholesterol.