Site-1 protease (S1P) cleaves membrane-bound sterol regulatory element-binding proteins (SREBPs), allowing their transcription-stimulating domains to translocate to the nucleus where they activate genes governing lipid synthesis. S1P is a potential target for lipid-lowering drugs, but the effect of S1P blockade in animals is unknown. Here, we disrupt the S1P gene in mice. Homozygous germ-line disruptions of S1P were embryonically lethal. To disrupt the gene inducibly in liver, we generated mice homozygous for a floxed S1P allele and heterozygous for a transgene encoding Cre recombinase under control of the IFN-inducible MX1 promoter. When IFN was produced, 70–90% of S1P alleles in liver were inactivated, and S1P mRNA and protein were reduced. Nuclear SREBPs declined, as did mRNAs for SREBP target genes. Cholesterol and fatty acid biosynthesis in hepatocytes declined by 75%. Low density lipoprotein (LDL) receptor mRNA declined by 50%, as did the clearance of ¹²⁵I-labeled LDL from plasma, but plasma cholesterol fell, suggesting that LDL production was reduced. These data raise the possibility that S1P inhibitors may be effective lipid-lowering agents, but they suggest that nearly complete inhibition will be required.