A novel cold-adapted lipolytic enzyme gene, est97, was identified from a high Arctic intertidal zone sediment metagenomic library. The deduced amino acid sequence of Est97 showed low similarity with other lipolytic enzymes, the maximum being 30 % identity with a putative lipase from Vibrio caribbenthicus. Common features of lipolytic enzymes, such as the GXSXG sequence motif, were detected. The gene product was over-expressed in Escherichia coli and purified. The recombinant Est97 (rEst97) hydrolysed various rho-nitrophenyl esters with the best substrate being rho-nitrophenyl hexanoate (K (m) and k (cat) of 39 mu M and 25.8 s(-1), respectively). This esterase activity of rEst97 was optimal at 35 A degrees C and pH 7.5 and the enzyme was unstable at temperatures above 25 A degrees C. The apparent melting temperature, as determined by differential scanning calorimetry was 39 A degrees C, substantiating Est97 as a cold-adapted esterase. The crystal structure of rEst97 was determined by the single wavelength anomalous dispersion method to 1.6 resolution. The protein was found to have a typical alpha/beta-hydrolase fold with Ser144-His226-Asp197 as the catalytic triad. A suggested, relatively short lid domain of rEst97 is composed of residues 80-114, which form an alpha-helix and a disordered loop. The cold adaptation features seem primarily related to a high number of methionine and glycine residues and flexible loops in the high-resolution structures.