The activity of hepatic 3-hydroxy-3-methylglutaryl-CoA reductase, the rate-limiting enzyme for liver cholesterol biosynthesis, has been determined in young hamsters given a diet known to produce cholesterol gallstones in this species and compared to the activity found in chow-fed hamsters. None of the hamsters fed the lithogenic diet for 15 days or less developed gallstones but 74 percent of those on the diet for 26 to 49 days had cholesterol gallstones. None of the chow-fed animals developed gallstones. The mean HMG CoA reductase activity of hamsters on the lithogenic diet at 4 to 6 hours after the onset of the dark period was 20 times greater than in hamsters in the fasting state and 12 times that of fed hamsters on the chow diet. These greatly elevated enzyme activities were found as early as 2 to 15 days on the lighogenic diet and thus long before the gallstones appeared. The percentage of the bile acid pool represented by chenodeoxycholic acid was significantly higher, and that cholic acid correspondingly lower on the gallstone-inducing diet. This shift in bile acid composition may have contributed to gallstone formation. No significant accumulation of cholesterol was noted in liver or carcass. Increased synthesis of cholesterol induced by the greatly stimulated enzyme activity in hamsters on the lithogenic diet could account for the increased secretion of cholesterol in bile noted by others with subsequent supersaturation of gallbladder bile with respect to cholesterol, and then gallstone formation.