Abstract: In the yeast as in other eukaryotes, formation and hydrolysis of steryl esters (SE) are processes linked to lipid storage. In Saccharomyces cerevisiae, the three SE hydrolases Tgl1p, Yeh1p and Yeh2p contribute to SE mobilization from their site of storage, the lipid particles/droplets. Here, we provide evidence for enzymatic and cellular properties of these three hydrolytic enzymes. Using the respective single, double and triple deletion mutants and strains overexpressing the three enzymes, we demonstrate that each SE hydrolase exhibits certain substrate specificity. Interestingly, disturbance in SE mobilization also affects sterol biosynthesis in a type of feedback regulation. Sterol intermediates stored in SE and set free by SE hydrolases are recycled to the sterol biosynthetic pathway and converted to the final product, ergosterol. This recycling implies that the vast majority of sterol precursors are transported from lipid particles to the endoplasmic reticulum, where sterol biosynthesis is completed. Ergosterol formed through this route is then supplied to its subcellular destinations, especially the plasma membrane. Only a minor amount of sterol precursors are randomly distributed within the cell after cleavage from SE. Conclusively, SE storage and mobilization although being dispensable for yeast viability contribute markedly to sterol homeostasis and distribution.