Retinoic acid at nanomolar concentrations modulates epidermal functions by serving as a transcription factor ligand. Under conditions of retinol sufficiency, it is imperative to limit retinoic acid biosynthesis from serum-derived retinol. In the epidermis, this is accomplished by esterifying retinol with long-chain fatty acids. Retinylester (RE) pools serve as a source of retinol for retinoic acid production under retinol deficiency and when required for proper differentiation. We have recently reported that GS2 lipase is expressed in keratinocytes and has the enzymatic properties of keratinocyte RE hydrolase. As GS2 lipase has a robust activity that can affect the intracellular retinol levels, we postulated that its activity must be regulated. Therefore, we screened keratinocyte cDNA expression libraries for the putative inhibitor. Herein, we report the identity of an inhibitor, TIP47, which prevents RE hydrolysis catalyzed by GS2 lipase and hormone-sensitive lipase. This protein was known to transport mannose-6-phosphate receptors from endosome to trans-Golgi and to be distributed between the cytoplasm and lipid droplets. Using a series of deletion mutants, we found two regions involved in the inhibitory activity. Residues within the carboxyl alpha3-alpha4 helices are essential in the context of the full-length protein. Residues within the amino-terminal also contribute depending on the context.