The cholesterol production of guinea pig leukemic (L2C) lymphocytes preceeds at greater than 30 times the rate found in normal cells. Fatty acid biosynthesis is also enhanced in L2C cells. Exposure of L2C cells to cholesterol/lecithin liposomes does not depress their sterol biosynthesis, in contrast to the behavior of normal lymphocytes [Philippot, J.R., Cooper, A.G. & Wallach, D. F. H. (1975) Biochim. Biophys. Acta 406, 161-166]. However, 25-hydroxycholesterol, an inhibitor of hydroxymethylglutaryl-CoA reductase (NADPH) [mevalonate: NADP+ oxidoreductase (CoA-acylating), EC 1.1.1.34], the rate limiting enzyme in cholesterogenesis, and 25-hydroxycholecalciferol, a biologically potent form of vitamin D3, block sterol biosynthesis of both normal and L2C lymphocytes [Philippot, j.r., cooper, A.G. & Wallach, D.F.H. (1976) Biochem. Biophys. Res. Commun. 72, 1035-1041]. Moreover, both cell types exchange cholesterol equivalently with cholesterol/lecithin liposomes. The only difference in sterol biosynthesis observed between the two cell types is in the temperature response of the enzyme. Arrhenius plots of this enzyme activity exhibit a prominent discontinuity at about 24 degrees in the case of normal cells, but none in the case of L2C. The activation energies for L2C cells and normal cells, above the normal cell transition temperature, were not significantly different. All of the data suggest that the regulatory defect in L2C lymphocytes arises from a deficiency in these cells' internal membranes.