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While a strong relationship between the hypercholesterolemia of diabetes and premature atherosclerosis is established, the etiology for the elevation in serum cholesterol in this disease is unknown. To determine whether diabetic hypercholesterolemia may be related to alterations in hepatic cholesterol transport capacity, sterol carrier protein-2 (SCP2) expression was examined in rats treated with streptozotocin (SZT). Furthermore, this study examined whether 17β-estradiol and insulin confer a protective effect on liver cholesterol homeostasis by maintaining hepatic SCP2 levels. SCP2 protein and mRNA expression were examined 13 days following SZT-induced diabetes onset and in diabetic rats treated with estradiol (1 cm silastic implant) or insulin (12 units/day). Data indicate that SCP2 protein levels were significantly reduced in the diabetic animals and that SCP2 protein expression in the liver was inversely related to the level of serum cholesterol in the diabetic animals. In contrast, SCP2 mRNA levels examined by slot blot, ribonuclease protection assay, and Northern blot analysis were significantly elevated. Both insulin and estradiol were able to enhance the expression of SCP2 protein in the liver following SZT treatment. The results of this investigation clearly indicate that hepatic SCP2 protein levels are significantly altered in the diabetic state suggesting that cholesterol transport capacity is reduced in the SZT-treated diabetic rat. The inverse relationship between serum cholesterol and hepatic SCP2 protein content suggests that the reduction in this protein may be a contributing factor in diabetic hypercholesterolemia.