Resident proteins of the endoplasmic reticulum lumen are continuously retrieved from an early Golgi compartment by a receptor-mediated mechanism. The sorting or retention sequence on the endoplasmic reticulum proteins is located at the C-terminus and was initially shown to be the tetrapeptide KDEL in mammalian cells and HDEL in Saccharomyces cerevisiae. The carboxylesterases are a large family of enzymes primarily localized to the lumen of the endoplasmic reticulum. Retention sequences in these proteins have been difficult to identify due to atypical and heterogeneous C-terminal sequences. Utilizing the polymerase chain reaction with degenerate primers, we have identified and characterized the C-termini of four members of the carboxylesterase family from rat liver. Three of the carboxylesterases sequences contained C-terminal sequences (HVEL, HNEL or HTEL) resembling the yeast sorting signal which were reported to be non-functional in mammalian cells. A fourth carboxylesterase contained a distinct C-terminal sequence, TEHT. A full-length esterase cDNA clone, terminating in the sequence HVEL, was isolated and was used to assess the retention capabilities of the various esterase C-terminal sequences. This esterase was retained in COS-1 cells, but was secreted when its C-terminal tetrapeptide, HVEL, was deleted. Addition of C-terminal sequences containing HNEL and HTEL resulted in efficient retention. However, the C-terminal sequence containing TEHT was not a functional retention signal. Both HDEL, the authentic yeast retention signal, and KDEL were efficient retention sequences for the esterase. These studies show that some members of the rat liver carboxylesterase family contain novel C-terminal retention sequences that resemble the yeast signal. At least one member of the family does not contain a C-terminal retention signal and probably represents a secretory form.