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Cocaine esterase (CocE) is the most efficient cocaine-metabolizing enzyme tested in vivo to date, displaying a rapid clearance of cocaine and a robust protection against cocaine's toxicity. A major obstacle to the clinical application of CocE, however, lies in its short in vivo half-life, proteolytic degradation, and induced immune response. To overcome these issues, PEGylation and cell encapsulation are employed in this dissertation study to modify CocE. These two strategies are designed to protect CocE from deactivation by circulating proteases and the host immune system, and therefore prolonging its in vivo half-life and reducing its immunogenicity. PEGylation of CocE was successfully carried out and characterized. The PEG-CocE conjugates prepared in this study showed a purity of greater than 93.5%. As demonstrated by the enzyme-linked immunosorbent assay (ELISA), attachment of PEG to CocE apparently inhibited the binding of anti-CocE antibodies to the PEG-CocE conjugate. In addition, PEGylation yielded protection to CocE against thermal degradation and protease digestion. Preliminary in vivo results suggested that, similarly to native CocE, the PEG-CocE conjugates were also able to protect animals from cocaine-induced lethality. Cell encapsulation of CocE was accomplished by creating a cell permeable form of CocE. Two cell penetrating peptides (CPPs), Tat and LMWP, were covalently linked to CocE, generating two chemical conjugates and four recombinant fusion proteins. The six CPP-CocE variants possessed a varied extent of cocaine hydrolyzing activity and cell permeability. The cellular uptake of CPP-CocE variants observed in HeLa cells, RBC, and nasal epithelial cells were found to be dependent upon incubation time and concentration. Moreover, the nasal epithelial cells transduced with CPP-DMCocEs retained the ability to hydrolyze cocaine, indicating preservation of the enzymatic activity of the cell-encapsulated CPP-DMCocE variants. In conclusion, the present studies suggest that PEGylation may prolong CocE's functionality in the circulation and reduce its potential immunogenicity. They also demonstrate that attachment of CPP groups enables CocE to become cell permeable and meanwhile maintains CocE's enzymatic activity. These strategies would not be valuable for potential clinical application of CocE, but also for other protein therapeutics with problems of in vivo stability and immunogenicity.