The objective of this study was to examine the effect of glucocorticoid treatment in early neonatal life on plasma cholesterol and hepatic cholesterol 7 alpha-hydroxylase (CH-7A), the rate-limiting enzyme of bile acid biosynthesis from cholesterol, measured at weaning (Postnatal Day 20). Neonatal rat pups were injected subcutaneously with 5 micrograms of dexamethasone (DEXA) or vehicle (CON) for 5 days between Postnatal Days 4 and 8. On Postnatal Day 20, the animals were used for various studies. DEXA-treated pups weighed significantly less (P less than 0.001) than controls. Even though DEXA-treated animals had significantly smaller livers (P less than 0.001), microsomal protein per gram of liver was significantly greater (P less than 0.005) in the DEXA-treated animals. CH-7A activity (pmole/mg . min) was significantly lower (P less than 0.005) in the DEXA-treated animals (CON (4) 19.4 +/- 2.8; DEXA (4) 5.0 +/- 1.0). Plasma cholesterol (mg/100 ml) was significantly greater (P less than 0.005) in the DEXA-treated animals (CON (5) 179 +/- 7; DEXA (4) 223 +/- 5), a finding consistent with lower CH-7A activity in this group. Taurocholate absorption by in situ ileal loops in anesthetized rats was significantly greater in the DEXA-treated animals in agreement with the in vitro observations of Little and Lester. The basis for the reduced CH-7A activity in DEXA-treated pups is not known. It may be due in part to a new steady state in the enterohepatic circulation of bile acids resulting from a glucocorticoid-induced enhanced conservation of bile acids.