Cholesterol 7alpha-hydroxylase, the rate-limiting enzyme in the bile acid biosynthetic pathway, is thought to be regulated by hydrophobic bile acids through negative feedback control. The role of cholesterol in the regulation of cholesterol 7alpha-hydroxylase is more controversial, in part because of incomplete understanding of the relationship between the pathways of cholesterol synthesis and degradation. The main objective of this study was to define the interaction between these two pathways in an experimental model in which the supply of newly synthesized cholesterol was interrupted by sustained infusion of mevinolin (lovastatin), an inhibitor of 3-hydroxy-3-methylglutaryl coenzyme A reductase (HMG-CoA reductase) or accelerated by a continuous infusion of mevalonate, a cholesterol precursor. The study was carried out in rats subjected to short-term bile fistula. In one set of experiments, rats were treated postoperatively with mevinolin (5 mg/kg loading dose followed by 2 mg/kg/hr infusion), mevalonate (180 mumol/hr infusion) or both for up to 96 hr. In a separate set of experiments, rats were infused intraduodenally with taurocholate (36 mumol/100 gm/hr for up to 96 hr). We determined cholesterol 7alpha-hydroxylase- and HMG-CoA reductase specific activities at those time intervals, whereas bile acid synthesis rates were determined throughout the study. Compared with rats not subjected to surgery rats with short-term biliary diversion had increases in cholesterol 7alpha-hydroxylase activity of 259% and 827% at 48 and 96 hr, respectively. The increase in bile acid biosynthesis was less pronounced. Continuous infusion of mevinolin completely prevented increases in cholesterol 7alpha-hydroxylase specific activity and bile acid biosynthesis at both time intervals. Intraduodenal infusion of taurocholate alone also suppressed cholesterol 7alpha-hydroxylase activity. In contrast, infusion of mevalonate led to rapid up-regulation of cholesterol 7alpha-hydroxylase, with activity 526% greater than basal levels at 48 hr. We conclude that regulation of cholesterol 7alpha-hydroxylase is under multivalent control involving a number of regulatory factors. Up-regulation of cholesterol 7alpha-hydroxylase after short-term biliary diversion occurs as a result of diversion of bile acids away from the liver and the presence of a normally functioning cholesterol biosynthetic pathway. Thus regulation of cholesterol 7alpha-hydroxylase appears to be under the dual control of bile acids and newly synthesized cholesterol or its metabolites. Lipoprotein cholesterol, a substrate for cholesterol 7alpha-hydroxylase and bile acid synthesis, does not compensate for the lack of endogenous production of cholesterol and, at least in this model, does not appear to be regulatory.