A recently discovered class of endogenous mammalian lipids, branched fatty acid esters of hydroxy fatty acids (FAHFAs), possesses anti-diabetic and anti-inflammatory activities. Here, we identified and validated carboxyl ester lipase (CEL), a pancreatic enzyme hydrolyzing cholesteryl esters and other dietary lipids, as a FAHFA hydrolase. Variants of CEL have been linked to maturity-onset diabetes of the young, type 8 (MODY8), and to chronic pancreatitis. We tested the FAHFA hydrolysis activity of the CEL MODY8 variant and found a modest increase in activity as compared with that of the normal enzyme. Together, the data suggest that CEL might break down dietary FAHFAs.