Extensive studies have demonstrated that the normal inhibition of cholesterol synthesis by cholesterol feeding is decreased in all hepatomas studied in vivo. This loss of the normal feedback regulation of cholesterol synthesis has been shown to be due to the failure of cholesterol ingestion to inhibit the activity of hydroxymethylglutaryl (HMG)-CoA reductase. The basis for this absence of feedback control of cholesterogenesis is unknown. Studies to date have not demonstrated structural or kinetic differences between the HMG-CoA reductase of normal liver and hepatoma. The present study, however, demonstrates significant differences in the activation state of HMG-CoA reductase from normal liver and hepatoma. In normal liver only approximately 10-20% of the microsomal HMG-CoA reductase is in the dephosphorylated, active form while 80-90% is in the phosphorylated, inactive state. In contrast, in three different Morris hepatomas in vivo, from 53 to 73% of the HMG-CoA reductase is in the active state. That the increased activation state in hepatomas is a property of tumor tissue and is not solely due to rapid growth is demonstrated by the fact that in both fetal and regenerating liver an enhanced activation state of HMG-CoA reductase is not observed. Additionally, preincubation with magnesium and ATP results in the inhibition of HMG-CoA reductase both in tumor and in liver. Presumably, this decrease in HMG-CoA reductase activity is due to the phosphorylation of the enzyme. Similarly, the preincubation of tumor and liver microsomes with phosphatase results in an increase in HMG-CoA reductase activity presumably by the dephosphorylation of the enzyme to its active form. The relationship between the altered activation state of HMG-CoA reductase in hepatomas and the reduction in the feedback regulation of this enzyme in liver tumors remains to be explored.