The rate of cholesterol degradation is tightly regulated in vivo. The major metabolic pathway for the degradation of cholesterol is via conversion to bile acids. The end-products of this pathway, the bile acids, are negative regulators of cholesterol degradation. This is an important feedback loop that regulates cholesterol homeostasis. Recent evidence indicates that the nuclear receptor FXR is a bile acid receptor that may be involved in this process. This proposal will involve a detailed analysis of the role of FXR in regulating cholesterol homeostasis. This will include a detailed description of the precise signaling molecules that bind to FXR and an analysis of the target genes that are modulated by this receptor. The mechanism of FXR activation or repression of gene expression will also be studied. Finally, the physiological function of FXR ligands will be studied through a combination of pharmacologic and genetic approaches.