The existence of a cholesteryl ester cycle in cultured Fu5AH hepatoma cells was documented and factors affecting the rate of turnover of the cholesteryl ester cycle in this cell line were explored. The influence of the physical state of the lipid inclusion in which the cholesteryl esters are stored could be addressed in this cell line because these cells can be induced to store cholesteryl esters in anisotropic (liquid-crystalline) cytoplasmic inclusions by exposure to free cholesterol-rich phospholipid dispersions or in isotropic (liquid) inclusions by addition of oleic acid to the phospholipid dispersions. To examine the relative rates of turnover of the cholesteryl ester cycle in the cells with the two types of inclusions, the fraction of cholesteryl linolenate, a cholesteryl ester present in low amounts in these inclusions, was examined after cells were exposed to medium containing linolenate. After 12 h, cells with anisotropic inclusions contained 17.5% cholesteryl linolenate and cells with isotropic inclusions contained 29.8% cholesteryl linolenate, suggesting an approximately 2-fold difference in turnover of the cholesteryl ester pool. To determine whether this difference was due to a differential rate of cholesteryl ester hydrolysis, the acyl CoA: cholesterol acyl transferase arm of the cholesteryl ester cycle was blocked using a specific inhibitor, Sandoz 58-035. In the presence of this compound, cholesteryl ester was hydrolysed twice as fast in cells with isotropic inclusions as compared to that in cells with anisotropic inclusions. The difference in rate of turnover of the cholesteryl ester cycle was shown to be related to the rate of hydrolysis of cholesteryl ester which, in turn, is related to the physical state of the stored cholesteryl ester.