In cultured hepatocytes conversion of [4-14C]cholesterol into bile acids was dose dependently reduced by the antimycotic drug ketoconazole, giving half-maximal inhibition at 10 microM ketoconazole in rat hepatocytes and at 1 microM in human hepatocytes. No change was observed in the ratio of produced cholic, beta-muricholic, and chenodeoxycholic acid with increasing amounts of the drug. Conversion of [4-14C]7 alpha-hydroxycholesterol, an intermediate of bile acid pathway, to bile acids was not affected by ketoconazole. These results together with kinetic studies with rat liver microsomes, demonstrating noncompetitive inhibition (Ki = 0.4 microM), indicate that cholesterol 7 alpha-hydroxylase is the main site of inhibition. In bile-diverted rats a single dose of ketoconazole (50 mg/kg) dramatically impaired bile flow and biliary bile acid output (92% inhibition). A similar blockade was observed using [4-14C]cholesterol as precursor for bile acid synthesis. Therefore, treatment of patients with this drug may inhibit bile acid synthesis, resulting in a reduction of the bile acid pool size after long-term ketoconazole therapy.