To elucidate whether Sterol O-acyltransferase (Soat) mediates the absorption and transportation of yolk lipids to the developing embryo, zebrafish soat1 and soat2 were cloned and studied. In the adult zebrafish, soat1 was detected ubiquitously while soat2 mRNA was detected specifically in the liver, intestine, brain and testis. Whole mount in situ hybridization demonstrated that both soat1 and soat2 expressed in the yolk syncytial layer, hatching gland and developing cardiovascular as well as digestive systems, suggesting that Soats may play important roles in the lipid trafficking and utilization during embryonic development. The enzymatic activity of zebrafish Soat2 was confirmed by Oil Red O staining in the HEK293 cells overexpressing this gene, and could be quenched by Soat2 inhibitor Pyripyropene A (PPPA). The zebrafish embryos injected with PPPA or morpholino oligo against soat2 in the yolk showed significantly larger yolk when compared with wild-type embryos, especially at 72 hpf, indicating a slower rate of yolk consumption. Our result indicated that zebrafish Soat2 is catalytically active in synthesizing cholesteryl esters and contributes to the yolk cholesterol trafficking during zebrafish embryogenesis.