It has been proposed that low density lipoprotein (LDL) must undergo oxidative modification before it can participate in atherosclerosis. The present paper studied the effect of cholesterol oxidation in LDL on cultured vascular smooth muscle cells. LDL was oxidized by cholesterol oxidase (3-beta-hydroxy-steroid oxidase) which catalyzes the oxidation of cholesterol to 4-cholesten-3 one and other oxidized cholesterol derivatives. Cholesterol oxidase treatment of LDL did not result in lipid peroxidation. Cultured rabbit aortic smooth muscle cells were morphologically changed following exposure to cholesterol oxidized LDL. Nile red, a hydrophobic probe which can selectively stain intracellular lipid droplets, was applied to detect the cellular lipid content after treatment with oxidized or non-oxidized LDL cholesterol. LDL which did not undergo oxidation of its cholesterol had no effect on the cells. However, cellular nile red fluorescence intensity was increased as the pre-incubation time of cholesterol oxidase with LDL increased. This was supported by HPLC analysis which revealed that the oxidized cholesterol content of treated cells increased. These findings suggest that cholesterol oxidation of LDL can alter lipid deposition in the cells and change cell morphology. The oxidation of cholesterol in vivo may play an important role in the modification of LDL which could contribute to the generation of the lipid-laden foam cells.