The enzyme catalyses the formation of sterol esters from a sterol and long-chain fatty acyl-coenzyme A. The enzyme from yeast, but not from mammals, prefers monounsaturated acyl-CoA. In mammals the enzyme acts mainly on cholesterol and forms cholesterol esters that are stored in cytosolic droplets, which may serve to protect cells from the toxicity of free cholesterol. In macrophages, the accumulation of cytosolic droplets of cholesterol esters results in the formation of `foam cells', a hallmark of early atherosclerotic lesions. In hepatocytes and enterocytes, cholesterol esters can be incorporated into apolipoprotein B-containing lipoproteins for secretion from the cell.