Alkyldihydroxyacetonephosphate synthase (alkyl-DHAP synthase) catalyzes the exchange of the ester-linked fatty acid of 1-O-acyldihydroxyacetone phosphate (1-O-acyl-DHAP) for a fatty alcohol that is attached in an ether linkage to form 1-O-alkyldihydroxyacetone phosphate (1-O-alkyl-DHAP). In our continuing investigation of the mechanism of this enzyme, we have examined the fatty acid released during the reaction. In contrast to the reports of others using whole microsomes, we found that the cleavage of fatty acid by purified preparations of alkyl-DHAP synthase was dependent on the presence of the cosubstrate, fatty alcohol. Furthermore, the amount of fatty acid produced was equivalent to the alkyl-DHAP formed. Our previously proposed detailed mechanism for alkyl-DHAP synthase predicted that the fatty acid should retain both of the carboxyl ester oxygens upon cleavage. Reactions carried out with palmitoyl-[18O]DHAP as substrate yielded [18O]palmitic acid as the product in agreement with this scheme.