H epatic cholesterol synthesis is controlled by both the size of the bile acid pool in the enterohepatic circulation and by the amount of cholesterol reaching the liver carried in chylomicron remnants. These studies were undertaken to examine how these two control mechanisms are interrelated. When the size of the pool was systematically varied, the logarithm of the rate of hepatic cholesterol synthesis varied in an inverse linear fashion with the size of the taurocholate pool between the limits of 0 and 60 mg of bile acid per 100 g of body weight. The slope of this relationship gave the fractional inhibition of cholesterol synthesis associated with expansion of the taurocholate pool and was critically dependent upon the amount of cholesterol available for absorption from the gastrointestinal tract. Furthermore, the degree of inhibition of cholesterol synthesis in the liver seen with taurocholate feeding was reduced by partially blocking cholesterol absorption with beta-sitosterol even though the bile acid pool was still markedly expanded. In rats with diversion of the intestinal lymph from the blood, a five-fold expansion of the taurocholate pool resulted in only slight suppression of the rate of hepatic cholesterol synthesis, and even this inhibition was shown to be attributable to small amounts of cholesterol absorbed through collateral lymphatic vessels and (or) to a fasting effect. Similarly, the infusion of either taurocholate or a combination of taurocholate and taurochenate into rats with no biliary or dietary cholesterol available for absorption caused no suppression of hepatic cholesterol synthesis. Finally, the effect of changes in the rate of bile acid snythesis on hepatic cholesterol synthesis was examined. The fractional inhibition of cholesterol synthesis found after administration of an amount of cholesterol sufficient to raise the hepatic cholesterol ester content by 1 mg/g equalled only --0.36 when bile acid snythesis was increased by biliary diversion but was --0.92 when bile acid synthesis was suppressed by bile acid feeding. It is concluded that (a) bile acids are not direct effectors of the rate of hepatic cholesterol synthesis, (b) most of the inhibitory activity seen with bile acid feeding is mediated through increased cholesterol absorption, and (c) bile acids do have an intrahepatic effect in that they regulate hepatic cholesterol synthesis indirectly by altering the flow of cellular cholesterol to bile acids.