The role of the Saccharomyces cerevisae peroxisomal acyl-coenzyme A (CoA) thioesterase (Pte1p) in fatty acid ß-oxidation was studied by analyzing the in vitro kinetic activity of the purified protein, as well as by measuring the carbon flux through the ß-oxidation cycle in vivo using the synthesis of peroxisomal polyhydroxyalkanoate (PHA) from the polymerization of the 3-hydroxyacyl-CoAs as a marker. The amount of PHA synthesized from the degradation of 10-cis-heptadecenoic acid, tridecanoic acid, undecanoic acid or nonanoic acid was equivalent or slightly reduced in the pte1 strain compared to wild type. In contrast, a strong reduction in PHA synthesized from heptanoic acid and 8-methyl-nonanoic acid was observed for the pte1 strain compared to wild type. The poor catabolism of 8-methyl-nonanoic acid via ß-oxidation in pte1 negatively impacted the degradation of 10-cis-heptadecenoic acid and reduced the ability of the cells to efficiently grow in media containing such fatty acids. An increase in the proportion of the short-chain 3-hydroxyacid monomers was observed in PHA synthesized in pte1 cells grown on a variety of fatty acids, indicating a reduction in the metabolism of short-chain acyl-CoAs in these cells. A purified histidine-tagged Pte1p showed a high activity towards short- and medium-chain-length acyl-CoAs, including butyryl-CoA, decanoyl-CoA and 8-methyl-nonanoyl-CoA. The kinetic parameters measured for the purified Pte1p fitted well with the implication of this enzyme in the efficient metabolism of short straight- and branched-chain fatty acyl-CoAs by the ß-oxidation cycle.