The acetylation of taxa-4(20),11(12)-dien-5alpha-ol is considered to be the third specific step of Taxol biosynthesis that precedes further hydroxylation of the taxane nucleus. An operationally soluble acetyl CoA:taxadienol-O-acetyl transferase was demonstrated in extracts of Taxus canadensis and Taxus cuspidata cells induced with methyl jasmonate to produce Taxol. The reaction was dependent on both cosubstrates and active enzyme, and the product of this acetyl transferase was identified by radiochromatographic and GC-MS analysis. Following determination of the time course of acetyl transferase appearance in induced cell cultures, the operationally soluble enzyme was partially purified by a combination of anion exchange, hydrophobic interaction, and affinity chromatography on immobilized coenzyme A resin. This acetyl transferase has a pI and pH optimum of 4.7 and 9.0, respectively, and a molecular weight of about 50,000 as determined by gel permeation chromatography. The enzyme shows high selectivity and high affinity for both cosubstrates, with Km values of 4.2 and 5.5 microM for taxadienol and acetyl CoA, respectively. The enzyme does not acetylate the more advanced Taxol precursors, 10-deacetylbaccatin III or baccatin III. This acetyl transferase is insensitive to monovalent and divalent metal ions, is only weakly inhibited by p-hydroxymercuribenzoate, N-ethylmaleimide, and coenzyme A, and resembles in general properties the few other O-acetyl transferases of higher plant origin that have been examined.