The effect of cholestane-3,5alpha,6-triol (CT) on the intestinal absorption of cholesterol and oleic acid, as well as the absorption of labeled CT, was studied in lymph ductcannulated rats. Intragastric administration of 50 mg of CT in an emulsion with cholesterol-7alpha-(3)H and oleic acid-1-(14)C resulted in 50% inhibition of sterol transfer into lymph but only 8% depression of fatty acid absorption over an 8 hr period. The absorption of labeled CT into lymph was only 2-3% compared with 50% absorption of cholesterol when each was fed alone. 10% of the fed CT was recovered in the intestinal mucosa, and of this, one-half was associated with the brush border fraction. In rats fed CT 6 days prior to cholesterol and fatty acid administration, there was no effect on fatty acid absorption, while cholesterol absorption was reduced by almost 30%. When the intestinal mucosa from these animals were investigated by electron microscopy, it appeared that CT feeding resulted in numerous enlarged mitochondria and a marked increase in length of the microvilli. If animals were allowed to recover for 6 days from the CT prefeeding regime, the intestinal mucosa appeared normal, and the absorption of cholesterol approached that in controls. A possible mechanism for CT inhibition of cholesterol absorption was shown to be competition for the enzyme cholesterol esterase which esterifies cholesterol prior to entrance into the lymphatic system. CT itself is poorly esterified and poorly absorbed, but it is effective in inhibiting esterification of cholesterol in vitro.