The functional interrelationship between biliary cholesterol secretion, sinusoidal lipoprotein cholesterol secretion and bile salt synthesis was studied in the rat. Diosgenin, fructose, and colestipol in the diet were used to, respectively, influence biliary cholesterol output, VLDL production and bile salt synthesis. In the acute bile fistula rat, biliary cholesterol output was 700% increased by diosgenin and 50% decreased by fructose. In the rats fed both diosgenin and fructose, biliary cholesterol secretion was increased only by approximately 200%, whereas biliary bile salts and phospholipid outputs were unchanged. In the isolated perfused liver, VLDL-cholesterol output was 50% reduced by diosgenin alone, but was unchanged following feeding of diosgenin plus fructose. However, the livers of rats fed diosgenin plus fructose exhibited a 700% increase in VLDL-triglyceride production and a 200% increase in VLDL-cholesterol output. A significant reciprocal relationship between VLDL-cholesterol secretion and the coupling ratio of cholesterol to bile salts in bile was observed. Colestipol added to the diet maintained both sinusoidal and biliary cholesterol outputs within the normal range. In the chronic bile fistula rat, colestipol increased bile salt synthesis by 100% while diosgenin and fructose diets had no effect. Similarly, the addition of fructose to the colestipol diet did not decrease bile salt synthesis. These data suggest a reciprocal relationship between biliary cholesterol secretion and hepatic secretion of cholesterol as VLDL particles. The free cholesterol pool used for bile salt synthesis seems functionally unrelated to the pool from which VLDL-cholesterol and biliary cholesterol originate. These findings support the idea that metabolic compartmentalization of hepatic cholesterol is a major determinant of the quantity of cholesterol available for recruitment by the bile salt-dependent biliary cholesterol secretory mechanism.