To determine the effects of different bile salts on the enzymic esterification of cholesterol and the hydrolysis of cholesterol esters rat liver homogenates and rat liver microsomes were incubated with varying amounts of different bile salts. Bile salts inhibited the formation of radioactive cholesterol esters in incubations of either rat liver homogenates or rat liver microsomes containing [14C]cholesterol. Chenodeoxycholate, glycochenodeoxycholate and taurochenodeoxycholate were more potent inhibitors than their comparable cholate analogues. Bile salts stimulated the hydrolysis of cholesterol esters when incubation were carried out with the liver homogenates. The dihydroxy bile salts were again more potent in this regard than the trihydroxylated bile salts. When the effects of bile salts on cholesterol ester hydrolysis were studied in in vitro incubations of hepatic microsomes a biphasic mode of acion was observed. In the absence of Na+ or K+ bile salts stimulated the hydrolysis of cholesterol oleate. However, following the addition of either Na+ or K+ to the microsomal incubations, bile salts caused an inhibition of cholesterol ester hydrolysis. Since cholesterol esterification was also inhibited under these conditions a direct inhibitory effect (not attributable to enhanced hydrolase activity) of the bile salts on the formation of cholesterol esters by the microsomes was established. Furthermore, this inhibition takes place at the transacylation step involving the fatty acyl-CoA ester and the sterol. These results suggest that bile salts can significantly alter the cholesterol-cholesterol ester profile in the liver, and furthermore, that these effects may be influenced by small changes in the intracellular environment in the region where these reactions occur.