Cholesterol 7 alpha-hydroxylase when assayed under conditions that favour phosphorylation can be activated or inactivated by MgATP, depending on ATP concentration and the pH of the incubation medium. Maximum stimulation of 7 alpha-hydroxylase was obtained with 0.5 mM ATP in both acidic and alkaline pH. At a pH lower than 7.4, 7 alpha-hydroxylase was inactivated by 2.0 and 3.0 mM MgATP. The inactivation by 3 mM MgATP was significantly greater at pH 6.7 than pH 7.4. Protein kinases enhanced these effects, suggesting covalent modification of the enzyme by phosphorylation. These findings are consistent with a protein kinase catalyzed phosphorylation, and suggest that MgATP may have a dual role in the activation and inactivation of 7 alpha-hydroxylase in vivo.