Ghrelin contains an octanoic acid at the third residue serine, and the presence of octanoic acid on ghrelin is critical to its physiological functions. The precise mechanism for the deacylation of ghrelin in circulation remains to be clarified, although the level of deacylated ghrelin (des-acyl ghrelin) is higher than that of acylated ghrelin in serum. In this study, rapid identification of ghrelin deacylation activity was achieved by matrix-assisted laser desorption/ionization time-of-flight mass spectrometry, and a ghrelin deacylation enzyme was purified 1515-fold from fetal bovine serum. Chromatographic separation showed a 24-kDa band on SDS-PAGE corresponding to ghrelin deacylation activity, and the protein band was identified as acyl-protein thioesterase 1 (APT1)/lysophospholipase I. A ghrelin deacylation enzyme in medium from HepG2 cells was also purified and identified as APT1. Although it lacks a secretion signal sequence, APT1 may be released by cells expressing APT1, mainly from liver in vivo. APT1 was originally purified as a cytosolic lysophospholipid hydrolyzing enzyme (lysophospholipase I), and recombinant APT1 exhibited deacylation activity as well as lysophospholipase activity in vitro. APT1 is released at high levels from RAW264.7 macrophage-like cells into the culture medium after stimulation with lipopolysaccharide (LPS), and LPS suppresses APT1 mRNA and protein expressions in these cells. More potent ghrelin deacylase activities were detected in sera from LPS-treated rats than in control sera. These results suggested that the serum activity of APT1 may play an important role in determination of the concentration of des-acyl ghrelin in circulation, especially under septic inflammation.