Acyl-coenzyme A:cholesterol acyltransferase (ACAT) inhibitors are currently in clinical development as potential lipid-lowering and antiatherosclerotic agents. We investigated the effect of avasimibe (Cl-1011), a novel ACAT inhibitor, on bile acid synthesis and cholesterol 7␣hydroxylase in cultured rat hepatocytes and rats fed different diets. Avasimibe dose-dependently decreased ACAT activity in rat hepatocytes in the presence and absence of -migrating very low-density lipoproteins (VLDL) (by 93% and 75% at 10 mol/L) and reduced intracellular storage of cholesteryl esters. Avasimibe (3 mol/L) increased bile acid synthesis (2.9-fold) after preincubation with VLDL and cholesterol 7␣-hydroxylase activity (1.7and 2.6-fold, with or without VLDL), the latter paralleled by a similar induction of its messenger RNA (mRNA). Hepatocytes treated with avasimibe showed a shift from storage and secretion of cholesteryl esters to conversion of cholesterol into bile acids. In rats fed diets containing different amounts of cholesterol and cholate, avasimibe reduced plasma cholesterol (by 52% to 71%) and triglyceride levels (by 28% to 62%). Avasimibe did not further increase cholesterol 7␣-hydroxylase activity and mRNA in cholesterol-fed rats, but prevented down-regulation by cholate. Avasimibe did not affect sterol 27-hydroxylase and oxysterol 7␣-hydroxylase, 2 enzymes in the alternative pathway in bile acid synthesis. No increase in the ratio of biliary excreted cholesterol to bile acids was found, indicating that ACAT inhibition does not result in a more lithogenic bile. Avasimibe increases bile acid synthesis in cultured hepatocytes by enhancing the supply of free cholesterol both as substrate and inducer of cholesterol 7␣-hydroxylase. These effects may partially explain the potent cholesterol-lowering effects of avasimibe in the rat.