The major metabolic pathway for elimination of cholesterol is via conversio
n to bile acids. In addition to this metabolic function, bile acids also ac
t as signaling molecules that negatively regulate their own biosynthesis. H
owever, the precise nature of this signaling pathway has been elusive. We h
ave isolated an endogenous biliary component (chenodeoxycholic acid) that s
electively activates the orphan nuclear receptor, FXR. Structure-activity a
nalysis defined a subset of related bile acid ligands that activate FXR and
promote coactivator recruitment. Finally, we show that ligand-occupied FXR
inhibits transactivation from the oxysterol receptor LXR alpha, a positive
regulator of cholesterol degradation. We suggest that FXR (BAR) is the end
ogenous bile acid sensor and thus an important regulator of cholesterol hom
eostasis.