Fish-eye disease is a rare genetic disorder of high density lipoprotein (HDL) metabolism that is characterized biochemically by a partial deficiency of the enzyme lecithin:cholesterol acyltransferase (LCAT). One of the mutations that is causative for fish-eye disease occurs at codon 123 of the LCAT gene. This mutation results in the exchange of a threonine residue for an isoleucine in the LCAT protein (Thr123-->Ile). In order to understand the functional significance of this exchange, we have used site-directed mutagenesis to reconstruct this mutation in an LCAT cDNA followed by expression of the mutant LCAT in COS-1 cells. The fish-eye disease mutation resulted in a 50% decrease in LCAT mass in the culture medium compared to wild type enzyme. The secreted mutant protein was incapable of esterifying cholesterol in HDL and HDL analogues. However, this protein retained the ability to esterify cholesterol in plasma and low density lipoprotein. These results support the hypothesis that this mutation is responsible for biochemical abnormalities of LCAT observed in fish-eye disease and the mutant LCAT protein has lost the potential to esterify cholesterol in the HDL pool but retains the ability to esterify cholesterol from other lipoproteins.