Acyl-coenzyme A:cholesterol acyltransferase (ACAT) is an enzyme involved in cellular cholesterol homeostasis and atherosclerosis. ACAT1 is an allosteric enzyme responding to its substrate cholesterol in a sigmoidal manner. It is a homotetrameric protein that spans the membrane multiple times, with its N-terminal 131 hydrophilic amino acids residing at the cytoplasmic side of the endoplasmic reticulum. This region contains two closely linked putative alpha-helices. Our current studies show that this region contains a dimer-forming motif. Adding this motif to the bacterial glutathione S-transferase (GST) converted the homodimeric GST to a tetrameric fusion protein. Conversely, deleting this motif from the full-length ACAT1 converted the enzyme from a homotetramer to a homodimer. The dimeric ACAT1 remains enzymatically active. Its biochemical characteristics, including the sigmoidal response to cholesterol, the IC(50) value toward a specific ACAT inhibitor, and sensitivity toward heat inactivation, are essentially unaltered. On the other hand, the dimeric ACAT1 exhibits a 5-10-fold increase in the V(max) of the overall reaction and a 2.2-fold increase in the K(m) for oleoyl-coenzyme. Thus, deleting the dimer-forming motif near the N-terminus changes ACAT1 from its tetrameric form to a dimeric form and increases its catalytic efficiency.