The host response to infection is associated with several alterations in lipid metabolism that promote lipoprotein production. These changes can be reproduced by lipopolysaccharide (LPS) administration. LPS stimulates hepatic cholesterol synthesis and suppresses the conversion of cholesterol to bile acids. LPS down-regulates hepatic cholesterol 7α-hydroxylase, the rate-limiting enzyme in the classic pathway of bile acid synthesis. We now demonstrate that LPS markedly decreases the activity of sterol 27-hydroxylase, the rate-limiting enzyme in the alternate pathway of bile acid synthesis, in the liver of Syrian hamsters. Moreover, LPS progressively decreases hepatic sterol 27-hydroxylase mRNA levels by 75% compared with controls over a 24-h treatment period. LPS also decreases oxysterol 7α-hydroxylase mRNA levels in mouse liver. In vitro studies in HepG2 cells demonstrate that tumor necrosis factor and interleukin (IL)-1 decrease sterol 27-hydroxylase mRNA levels by 48 and 80%, respectively, whereas IL-6 has no such effect. The IL-1-induced decrease in sterol 27-hydroxylase mRNA expression occurs early, is sustained for 48 h, and requires very low doses. In vivo IL-1 treatment also lowers hepatic sterol 27-hydroxylase mRNA levels in Syrian hamsters. Studies investigating the molecular mechanisms of LPS-induced decrease in sterol 27-hydroxylase show that LPS markedly decreases mRNA and protein levels of hepatocyte nuclear factor-1 (HNF-1), a transcription factor that regulates sterol 27-hydroxylase, in the liver. Moreover, LPS decreases the binding activity of HNF-1 by 70% in nuclear extracts in hamster liver, suggesting that LPS may down-regulate sterol 27-hydroxylase by decreasing the binding of HNF-1 to its promoter. Coupled with our earlier studies on cholesterol 7α-hydroxylase, these data indicate that LPS suppresses both the classic and alternate pathways of bile acid synthesis. A decrease in bile acid synthesis in liver would reduce cholesterol catabolism and thereby contribute to the increase in hepatic lipoprotein production that is induced by LPS and cytokines.