In this work, genome mining was used to identify esterase/lipase genes in the archaeon Pyrobaculum sp. 1860. A gene was cloned and functionally expressed in Escherichia coli as His-tagged protein. The recombinant enzyme (rP186_1588) was verified by western blotting and peptide mass fingerprinting. Biochemical characterization revealed that rP186_1588 exhibited optimum activity at pH 9.0 and 80 degrees C towards p-nitrophenyl acetate (K-m: 0.35 mM, k(cat): 11.65 s(-1)). Interestingly, the purified rP186_1588 exhibited high thermostability retaining 70% relative activity after incubation at 90 degrees C for 6 h. Circular dichroism results indicated that rP186_1588 showed slight structure alteration from 60 to 90 degrees C. Structural modeling showed P186_1588 possessed a typical alpha/beta hydrolase's fold with the catalytic triad consisting of Ser97, Asp147 and His172, and was further confirmed by site-directed mutagenesis. Comparative molecular simulations at different temperatures (300, 353, 373 and 473 K) revealed that its thermostability was associated with its conformational rigidity. The binding free energy analysis by MM-PBSA method revealed that the van der Waals interaction played a major role in p-NP ester binding for P186_1588. Our data provide insights into the molecular structures of this archaeal esterase, and may help to its further protein engineering for industrial applications.