Monolayer cultures of hepatocytes isolated from cholestyramine-fed rats and incubated in serum-free medium converted exogenous [4-14C]cholesterol into bile acids at a 3-fold greater rate than did cultures of hepatocytes prepared from untreated rats. Cholic acid and beta-muricholic acid identified and quantitated by gas-liquid chromatography and thin-layer chromatography were synthesized by cultured cells for at least 96 h following plating. The calculated synthesis rate of total bile acids by hepatocytes prepared from cholestyramine-fed animals was approximately 0.058 micrograms/mg protein/h. beta-Muricholic acid was synthesized at approximately a 3-fold greater rate than cholic acid in these cultures. Cultured hepatocytes rapidly converted the following intermediates of the bile acid pathway; 7 alpha-hydroxy[7 beta-3H]cholesterol, 7 alpha-hydroxy-4-[6 beta-3H] cholesten-3-one, and 5 beta-[7 beta-3H]cholestane-3 alpha, 7 alpha, 12 alpha-triol into bile acids. [24-14C]Chenodeoxycholic acid and [3H]ursodeoxycholic acid were rapidly biotransformed to beta-muricholic acid. 3-Hydroxy-3-methylglutaryl-coenzyme A reductase activity measured in microsomes of cultured hepatocytes decreased during the initial 48 h following plating, but remained relatively constant for the next 72 h. In contrast, cholesterol 7 alpha-hydroxylase activity appeared to decrease during the first 48 h, followed by an increase over the next 48 h. Despite the apparent changes in enzyme activity in vitro, the rate of bile acid synthesis by whole cells during this time period remained constant. It is concluded that primary monolayer cultures of rat hepatocytes can serve as a useful model for studying the interrelationship between cholesterol and bile acid metabolism.