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Purpose: The oral prodrug of gemcitabine LY2334737 is cleaved systemically to gemcitabine; the mechanism responsible for hydrolysis is unknown. LY2334737 cytotoxicity was tested in the NCI-60 panel; mining of microarray expression data identified carboxylesterase (CES) as a top hydrolase candidate. Studies examined whether CES is responsible for hydrolysis and whether cellular CES expression confers prodrug sensitivity., Experimental Design: Human recombinant CES isozymes were assayed for LY2334737 hydrolysis. Stable CES-overexpressing HCT-116 transfectants and a SK-OV-3 knockdown were prepared. Cell lines were tested for drug sensitivity and CES expression by quantitative real time-PCR (qRT-PCR), Western blotting, and immunohistochemical staining. Bystander cytotoxicity studies were conducted with GFP-tagged PC-3 cells as the reporter cell line. Therapeutic response of the HCT-116 transfectants was evaluated in xenografts., Results: Of 3 human CES isozymes tested, only CES2 hydrolyzed LY2334737. Five cell lines that express CES2 responded to LY2334737 treatment. LY2334737 was less cytotoxic to a SK-OV-3 CES2 knockdown than parental cells. The drug response of CES2-transfected HCT-116 cells correlated with CES2 expression level. Bystander studies showed statistically greater PC-3-GFP growth inhibition by LY2334737 when cells were cocultured with CES2 and not mock transfectants. Oral treatment of xenograft models with 3.2 mg/kg LY2334737 once a day for 21 days showed greater tumor growth inhibition of CES2 transfectant than the mock transfectant (P ≤ 0.001)., Conclusions: CES2 is responsible for the slow hydrolysis of LY2334737. Because intact prodrug circulates at high plasma levels after oral LY2334737 administration, improved response rates may be observed by tailoring LY2334737 treatment to patients with CES2 tumor expression., (©2012 AACR.)