GS2 (PNPLA4; iPLAeta) is the smallest member of the patatin-like family of phospholipases (PNPLA). It was initially identified by its ability to hydrolyze retinylesters (RE) in cell homogenates, and was later found to esterify retinol using a variety of acyl donors. In the present study we set out to determine its cellular function and examined its impact on RE status in 293T cells transfected with GS2, GS2-M1 (a non-translatable mutant of GS2) and empty vector, in fibroblasts isolated from normal and GS2-null donors and in SCC12b and in a somatic cell knock-out of GS2 (SCC12b-GS2(neo/-)), that we generated by homologous recombination. At 50nM medium retinol, GS2 had no significant impact on RE accumulation. However, at 2muM retinol, GS2 promoted a 1.6- to 5-fold increase in RE accumulation. To verify role of GS2 as a catalyst, RE levels were measured in 293T transfected wild type GS2, catalytic dyad mutants devoid of enzymatic activity, or alanine substitution mutants spanning the entire GS2 sequence. Surprisingly, every GS2 mutant promoted RE accumulation. This activity was also observed in the GS2 paralogues and rat orthologue. The data demonstrate that within the context of the cell GS2 promotes RE accumulation and may do so either as a catalyst or as a regulatory protein that enhances RE formation catalyzed by other acyl transferases.