The oxysterol-activated nuclear receptor liver X receptor alpha (LXRalpha) has been implicated in the control of both cholesterol and fatty acid metabolism. In this study, we have evaluated the effects of excess dietary cholesterol on hepatic cholesterol metabolism, lipogenesis, and VLDL production in homozygous (Lxralpha(-/-)), heterozygous (Lxralpha(+/-)), and wild-type mice. Mice were fed either chow or a cholesterol-enriched diet (1%, w/w) for 2 weeks. On the high-cholesterol diet, fractional cholesterol absorption was higher in Lxralpha(-/-) mice than in controls, leading to delivery of more dietary cholesterol to the liver. Lxralpha(-/-) mice were not able to induce expression of hepatic Abcg5/Abcg8, and massive accumulation of free cholesterol and cholesteryl esters (CEs) occurred. Interestingly, despite the inability to upregulate Abcg5/Abcg8, the highly increased hepatic free cholesterol content did stimulate biliary cholesterol output in Lxralpha(-/-) mice. Hepatic cholesterol accumulation was accompanied by decreased hepatic expression of lipogenic genes, probably caused by impaired sterol-regulatory element binding protein 1c processing, lower hepatic triglyceride (TG) contents, strongly reduced plasma TG concentrations (-90%), and reduced VLDL-TG production rates (-60%) in Lxralpha(-/-) mice. VLDL particles were smaller and CE-enriched under these conditions. Lxralpha deficiency did not affect VLDL formation under chow-fed conditions. Hepatic stearyl coenzyme A desaturase 1 expression was decreased dramatically in Lxralpha(-/-) mice and did not respond to cholesterol feeding, but fatty acid profiles of liver and VLDL were only slightly different between Lxralpha(-/-) and wild-type mice. Our data indicate that displacement of TGs by CEs during the VLDL assembly process underlies hypotriglyceridemia in cholesterol-fed Lxralpha(-/-) mice.