Peroxisomes are organelles that perform diverse metabolic functions in different organisms, but a common function is β-oxidation of a variety of long chain aliphatic, branched, and aromatic carboxylic acids. Import of substrates into peroxisomes for β-oxidation is mediated by ATP binding cassette (ABC) transporter proteins of subfamily D, which includes the human adrenoleukodystropy protein (ALDP) defective in X-linked adrenoleukodystrophy (X-ALD). Whether substrates are transported as CoA esters or free acids has been a matter of debate. Using COMATOSE (CTS), a plant representative of the ABCD family, we demonstrate that there is a functional and physical interaction between the ABC transporter and the peroxisomal long chain acyl-CoA synthetases (LACS)6 and -7. We expressed recombinant CTS in insect cells and showed that membranes from infected cells possess fatty acyl-CoA thioesterase activity, which is stimulated by ATP. A mutant, in which Serine 810 is replaced by asparagine (S810N) is defective in fatty acid degradation in vivo, retains ATPase activity but has strongly reduced thioesterase activity, providing strong evidence for the biological relevance of this activity. Thus, CTS, and most likely the other ABCD family members, represent rare examples of polytopic membrane proteins with an intrinsic additional enzymatic function that may regulate the entry of substrates into the β-oxidation pathway. The cleavage of CoA raises questions about the side of the membrane where this occurs and this is discussed in the context of the peroxisomal coenzyme A (CoA) budget.