Feedback regulation of cholesterol biosynthesis is mediated by membrane-bound transcription factors designated sterol regulatory element-binding proteins (SREBP)-1 and -2. In sterol-deprived cultured cells, SREBPs are released from membranes by a proteolytic process that is stimulated by SREBP cleavage-activating protein (SCAP), a membrane protein containing a sterol-sensing domain. Sterols suppress SREBP cleavage by blocking the action of SCAP, thereby decreasing cholesterol synthesis. A point mutation in SCAP(D443N) causes resistance to sterol suppression. In this article, we produced transgenic mice that express mutant SCAP(D443N) in liver. In these livers the nuclear content of SREBP-1 and -2 was increased, mRNAs encoding proteins involved in uptake and synthesis of cholesterol and fatty acids were elevated, and the livers were engorged with cholesteryl esters and triglycerides enriched in monounsaturated fatty acids. When the mice were challenged with a high cholesterol diet, cleavage of SREBP-1 and -2 was reduced in wild-type livers and less so in transgenic livers. We conclude that SCAP(D443N) stimulates proteolytic processing of native SREBPs in liver and decreases the normal sterol-mediated feedback regulation of SREBP cleavage, suggesting a central role for SCAP as a sterol sensor in liver.