Lecithin:retinol acyltransferase-like proteins, also referred to as HRAS-like tumor suppressors, comprise a vertebrate subfamily of papain-like or NlpC/P60 thiol proteases that function as phospholipid-metabolizing enzymes. HRAS-like tumor suppressor 3, a representative member of this group, plays a key role in regulating triglyceride accumulation and energy expenditure in adipocytes and therefore constitutes a novel pharmacological target for treatment of metabolic disorders causing obesity. Here, we delineate a catalytic mechanism common to lecithin:retinol acyltransferase-like proteins and provide evidence for their alternative robust lipid-dependent acyltransferase enzymatic activity. We also determined high resolution crystal structures of HRAS-like tumor suppressor 2 and 3 to gain insight into their active site architecture. Based on this structural analysis, two conformational states of the catalytic Cys-113 were identified that differ in reactivity and thus could define the catalytic properties of these two proteins. Finally, these structures provide a model for the topology of these enzymes and allow identification of the protein-lipid bilayer interface. This study contributes to the enzymatic and structural understanding of HRAS-like tumor suppressor enzymes.