In man, hepatic mitochondrial sterol 27-hydroxylase and microsomal cholesterol 7α-hydroxylase initiate distinct pathways of bile acid biosynthesis from cholesterol, the “acidic” and “neutral” pathways, respectively. A similar acidic pathway in the rat has been hypothesized, but its quantitative importance and ability to be regulated at the level of sterol 27-hydroxylase are uncertain. In this study, we explored the molecular regulation of sterol 27-hydroxylase and the acidic pathway of bile acid biosynthesis in primary cultures of adult rat hepatocytes. mRNA and protein turnover rates were approximately 10-fold slower for sterol 27-hydroxylase than for cholesterol 7α-hydroxylase. Sterol 27-hydroxylase mRNA was not spontaneously expressed in culture. The sole requirement for preserving sterol 27-hydroxylase mRNA at the level of freshly isolated hepatocytes (0 h) after 72 h was the addition of dexamethasone (0.1 μM; > 7-fold induction). Sterol 27-hydroxylase mRNA, mass and specific activity were not affected by thyroxine (1.0 μM), dibutyryl-cAMP (50 μM), nor squalestatin 1 (150 nM-1.0 μM), an inhibitor of cholesterol biosynthesis. Taurocholate (50 μM), however, repressed sterol 27-hydroxylase mRNA levels by 55%. Sterol 27-hydroxylase specific activity in isolated mitochondria was increased > 10-fold by the addition of 2-hydroxypropyl-β-cyclodextrin. Under culture conditions designed to maximally repress cholesterol 7α-hydroxylase and bile acid synthesis from the neutral pathway but maintain sterol 27-hydroxylase mRNA and activity near 0 h levels, bile acid synthesis from [¹⁴C]cholesterol remained relatively high and consisted of β-muricholate, the product of chenodeoxycholate in the rat. We conclude that rat liver harbors a quantitatively important alternative pathway of bile acid biosynthesis and that its initiating enzyme, sterol 27-hydroxylase, may be slowly regulated by glucocorticoids and bile acids.