Aim/hypothesis. Type I diabetes is associated with altered hepatic bile formation and increased intestinal cholesterol absorption. The aim of this study was to evaluate whether altered expression of the ATP-Binding Cassette half-transporters Abcg5 and Abcg8, recently implicated in control of both hepatobiliary cholesterol secretion and intestinal cholesterol absorption, contributes to changed cholesterol metabolism in experimental diabetes. Methods. mRNA and protein expression of Abcg5 and Abcg8 were determined in the liver and intestine of rats with streptozotozin-induced diabetes and related to relevant metabolic parameters in plasma, liver and bile. Results. Hepatic mRNA expression of both Abcg5 (−76%) and Abcg8 (−71%) was reduced in diabetic rats when compared to control rats. In spite of increased HDL cholesterol, considered a major source of biliary cholesterol, secretion of the sterol into bile relative to that of bile salts was reduced by 65% in diabetic animals. Intestinal mRNA expression of Abcg5 (−47%) and Abcg8 (−43%) as well as Abcg5 protein contents were also reduced in insulin-deficient animals. This was accompanied by a three-to four-fold increase in plasma β-sitosterol and campesterol concentrations and by a doubling of the calculated apparent cholesterol absorption. These effects partially normalized upon insulin supplementation. Conclusion/interpretation. Our data indicate that effects of insulin-deficiency on bile composition and cholesterol absorption in rats are, at least partly, attributable to changes in hepatic and intestinal Abcg5 and Abcg8 expression. [Diabetologia (2004) Type I diabetes mellitus is associated with specific changes in cholesterol metabolism in humans [1] and in experimental animals [2,3], including increased concentrations of plasma cholesterol, enhanced conversion of cholesterol into bile salts and an enhanced intestinal cholesterol absorption. The hepatobiliary pathway is of crucial importance for the maintenance of cholesterol homeostasis [4]. Bile salts that are secreted by the liver into the intestinal lumen are required for intestinal absorption of dietary cholesterol. The majority of bile salts is subsequently reabsorbed from the intestine and returns to the liver for re-secretion into the bile. The relatively small fraction of bile salts that escapes intestinal absorption is compensated for by de novo synthesis from cholesterol in the liver. Secondly, bile contains considerable amounts of free cholesterol. Since only a part of biliary cholesterol is reabsorbed from the intestine [5], the biliary pathway contributes to a major extent to cholesterol turnover. It is well-established that