Human bile acid-CoA:amino acid N-acyltransferase (hBAT), an enzyme catalyzing the conjugation of bile acids with the amino acids glycine or taurine has significant sequence homology with dienelactone hydrolases and other α/β hydrolases. These enzymes have a conserved catalytic triad that maps onto the mammalian BATs at residues Cys-235, Asp-328, and His-362 of the human sequence, albeit that the hydrolases contain a serine instead of a cysteine. In the present study, the function of the putative catalytic triad of hBAT was examined by chemical modification with the cysteine alkylating reagent N-ethylmaleimide (NEM) and by site-directed mutagenesis of the triad residues followed by enzymology studies of mutant and wild-type hBATs. Treatment with NEM caused inactivation of wild-type hBAT. However, preincubation of wild-type hBAT with the substrate cholyl-CoA before NEM treatment prevented loss of N-acyltransferase activity. Substitution of His-362 or Asp-328 with alanine results in inactivation of hBAT. Although substitution of Cys-235 with serine generated an hBAT mutant with lower N-acyltransferase activity, it substantially increased the bile acid-CoA thioesterase activity compared with wild type. In summary, data from this study support the existence of an essential catalytic triad within hBAT consisting of Cys-235, His-362, and Asp-328 with Cys-235 serving as the probable nucleophile and thus the site of covalent attachment of the bile acid molecule.