The initial and rate-limiting step in the classic pathway of bile acid biosynthesis is 7alpha-hydroxylation of cholesterol, a reaction catalyzed by cholesterol 7alpha-hydroxylase (CYP7A1). The effect of CYP7A1 overexpression on cholesterol homeostasis in human liver cells has not been examined. The specific aim of this study was to determine the effects of overexpression of CYP7A1 on key regulatory steps involved in hepatocellular cholesterol homeostasis, using primary human hepatocytes (PHH) and HepG2 cells. Overexpression of CYP7A1 in HepG2 cells and PHH was accomplished by using a recombinant adenovirus encoding a CYP7A1 cDNA (AdCMV-CYP7A1). CYP7A1 overexpression resulted in a marked activation of the classic pathway of bile acid biosynthesis in both PHH and HepG2 cells. In response, there was decreased HMG-CoA-reductase (HMGR) activity, decreased acyl CoA:cholesterol acyltransferase (ACAT) activity, increased cholesteryl ester hydrolase (CEH) activity, and increased low-density lipoprotein receptor (LDLR) mRNA expression. Changes observed in HMGR, ACAT, and CEH mRNA levels paralleled changes in enzyme specific activities. More specifically, LDLR expression, ACAT activity, and CEH activity appeared responsive to an increase in cholesterol degradation after increased CYP7A1 expression. Conversely, accumulation of the oxysterol 7alpha-hydroxycholesterol in the microsomes after CYP7A1 overexpression was correlated with a decrease in HMGR activity.