The properties of the enzyme catalyzing the formation of non-polar derivatives of estradiol-17 beta (E2) esterified to long-chain fatty acids have been investigated in microsomal preparations from bovine placenta cotyledons. A rapid enzyme assay has been developed which involves simple solvent partitioning. The membrane-bound enzyme showed a pH optimum of 5.0 and addition of fatty acyl-coenzymes A (CoAs), such as oleoyl-CoA, palmitoyl-CoA and palmitoleoyl-CoA, increased [3H]E2-fatty acyl ester formation from [3H]E2 by some 7-fold. Linoleoyl-CoA, linolenoyl-CoA and arachidonoyl-CoA were much less effective as acyl donors. Only 17 beta-fatty acyl monoesters were synthesized in each instance. Similar results were obtained with microsomes or mitochondria from bovine endometrium. The apparent Km for E2 employing placenta microsomes was 8.0 +/- 2.2 (SD) microM. Steroids such as testosterone, dehydroepiandrosterone and 5-androstene-3 beta, 17 beta-diol acted as competitive inhibitors (Ki values 79, 46 and 39 microM, respectively). These, and other data to be reported separately, which showed that these steroids were substrates for the enzyme, demonstrate that the latter is not specific for E2. The [3H]E2-fatty acyl ester fractions biosynthesized from [3H]E2 and bovine placental or endometrial tissue were analyzed by high pressure liquid chromatography (HPLC) and were found to have similar compositions characterized by a high percentage of unsaturated fatty acids.