Acyl-CoA:monoacylglycerol acyltransferase (MGAT) plays an important role in dietary fat absorption by catalyzing a rate-limiting step in the re-synthesis of diacylglycerols in enterocytes. The present study reports further characterization of MGAT2, a newly identified intestinal MGAT (Cao, J., Lockwood, J., Burn, P., and Shi, Y. (2003) J. Biol. Chem. 278, 13860-13866) for its substrate specificity, requirement for lipid cofactors, optimum pH and Mg2+, and other intrinsic properties. MGAT2 enzyme expressed in COS-7 cells displayed a broad range of substrate specificity toward fatty acyl-CoA derivatives and monoacylglycerols, among which the highest activities were observed with oleoyl-CoA and rac-1-monolauroylglycerol, respectively. MGAT2 appeared to acylate monoacylglycerols containing unsaturated fatty acyls in preference to saturated ones. Lipid cofactors that play roles in signal transduction were shown to modulate MGAT2 activities. In contrast to oleic acid and sphingosine that exhibited inhibitory effects, phosphatidylcholine, phosphatidylserine, and phosphatidic acid stimulated MGAT2 activities. Using recombinant murine MGAT2 expressed in Escherichia coli, we demonstrated conclusively that MGAT2 also possessed an intrinsic acyl-CoA:diacylglycerol acyltransferase (DGAT) activity, which could provide an alternative pathway for triacylglycerol synthesis in the absence of DGAT. In contrast to the inhibitory effect on MGAT2 activities, nonionic and zwitterionic detergents led to a striking activation of DGAT activity of the human DGAT1 expressed in mammalian cells, which further distinguished the behaviors of the two enzymes. The elucidation of properties of MGAT2 will facilitate future development of compounds that inhibit dietary fat absorption as a means to treat obesity.