Treatment of rat intestinal epithelial cell cultures with the oxidosqualene cyclase inhibitor, 3 beta-[2-(diethylamino)-ethoxy]androst-5-en-17-one (U18666A), resulted in an accumulation of squalene 2,3:22,23-dioxide (SDO). When U18666A was withdrawn and the cells were treated with the sterol 14 alpha-demethylase inhibitor, ketoconazole, SDO was metabolized to a product identified as 24(S),25-epoxylanosterol. To test the biological effects and cellular metabolism of this compound, we prepared 24(RS),25-epoxylanosterol by chemical synthesis. The epimeric mixture of 24,25-epoxylanosterols could be resolved by high performance liquid chromatography on a wide-pore, non-endcapped, reverse phase column. Both epimers were effective suppressors of 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase activity of IEC-6 cells. The suppressive action of the natural epimer, 24(S),25-epoxylanosterol, but not that of 24(R),25-epoxylanosterol could be completely prevented by ketoconazole. IEC-6 cells could efficiently metabolize biosynthetic 24(S),25-epoxy[3H]anosterol mainly to the known reductase-suppressor 24(S),25-epoxycholesterol. This metabolism was substantially reduced by ketoconazole. These data support the conclusion that 24(S),25-epoxylanosterol per se is not a suppressor of HMG-CoA reductase activity but is a precursor to a regulatory oxysterol(s). It has recently been reported that 25-hydroxycholesterol can occur naturally in cultured cells in amounts sufficient to effect regulation of HMG-CoA reductase (Saucier et al. 1985. J. Biol. Chem. 260: 14571-14579). In order to investigate the biological effects of possible precursors of 25-hydroxycholesterol, we chemically synthesized 25-hydroxylanosterol and 25-hydroxylanostene-3-one. Both oxylanosterol derivatives suppressed cellular sterol synthesis at the level of HMG-CoA reductase. U18666A had the unusual effect of potentiating the inhibitory effect of 25-hydroxylanostene-3-one but did not influence the effect of other oxylanosterols. All the oxylanosterols, with the exception of 25-hydroxylanostene-3-one, enhanced intracellular esterification of cholesterol. The foregoing observations support consideration of oxylanosterols as playing an important role in the biological formation of regulatory oxysterols that modulate sterol biosynthesis at the level of HMG-CoA reductase.