The N-terminal amino acid sequences of proteolytic fragments of neuropathy target esterase (NTE), covalently labelled on its active-site serine by a biotinylated organophosphorus ester, were determined and used to deduce the location of this serine residue and to initiate cloning of its cDNA. A putative NTE clone, isolated from a human foetal brain cDNA library, encoded a 1327 residue polypeptide with no homology to any known serine esterases or proteases. The active-site serine of NTE (Ser-966) lay in the centre of a predicted hydrophobic helix within a 200-amino-acid C-terminal domain with marked similarity to conceptual proteins in bacteria, yeast and nematodes; these proteins may comprise a novel family of potential serine hydrolases. The Swiss Cheese protein which, when mutated, leads to widespread cell death in Drosophila brain [Kretzschmar, Hasan, Sharma, Heisenberg and Benzer (1997) J. Neurosci. 17, 7425-7432], was strikingly homologous to NTE, suggesting that genetically altered NTE may be involved in human neurodegenerative disease.