Propensity for cholesterol gallstone formation is determined in part by biliary cholesterol content relative to bile salts and phospholipid. We examined the hypothesis that the rate of biliary cholesterol secretion can be controlled by availability of an hepatic metabolically active free cholesterol pool whose size is determined in part by rates of sterol synthesis, as reflected by activity of the primary rate-limiting enzyme 3-hydroxy-3-methylglutaryl coenzyme A (HMG CoA) reductase and of sterol esterification, as reflected by the activity of the enzyme acyl coenzyme A/cholesterol acyltransferase (ACAT). Rats were prepared with biliary, venous, and duodenal catheters. The enterohepatic circulation of biliary lipids was maintained constant by infusion of a bile salt, lecithin, cholesterol replacement solution. Administration of 25-hydroxycholesterol decreased HMG CoA reductase activity, increased ACAT activity, and decreased biliary cholesterol output 26% by 1 h. By 2 h, ACAT activity and biliary cholesterol secretion were at control levels. Administration of mevinolin, a competitive inhibitor of HMG CoA reductase, had no effect on ACAT activity and decreased biliary cholesterol secretion 16%. Administration of progesterone, an inhibitor of ACAT, had no effect on HMG CoA reductase and increased biliary cholesterol output 32% at 1 h. By 2 h, all parameters were near control levels. None of these agents had any significant effect on biliary bile salt or phospholipid secretion. Thus, acutely altering rates of esterification and/or synthesis can have profound effects on biliary cholesterol secretion independent of the other biliary lipids. These experiments suggest the existence of a metabolically active pool of free cholesterol that serves as a precursor pool for biliary cholesterol secretion. Furthermore, the size of this precursor pool is determined in part both by rates of cholesterol synthesis and esterification and is a key determinant of biliary cholesterol secretion.