The retinoid-related orphan receptors (RORs) and liver X receptors (LXRs) were postulated to have distinct functions. RORs play a role in tissue development and circadian rhythm, whereas LXRs are sterol sensors that affect lipid homeostasis. In this study, we revealed a novel function of RORalpha (NR1F1) in regulating the oxysterol 7alpha-hydroxylase (Cyp7b1), an enzyme critical for the homeostasis of cholesterol, bile acids, and oxysterols. The expression of Cyp7b1 gene was suppressed in the RORalpha null (RORalpha(sg/sg)) mice, suggesting RORalpha as a positive regulator of Cyp7b1. Promoter analysis established Cyp7b1 as a transcriptional target of RORalpha, and transfection of RORalpha induced the expression of endogenous Cyp7b1 in the liver. Interestingly, Cyp7b1 regulation seemed to be RORalpha-specific, because RORgamma had little effect. Reporter gene analysis showed that the activation of Cyp7b1 gene promoter by RORalpha was suppressed by LXRalpha (NR1H3), whereas RORalpha inhibited both the constitutive and ligand-dependent activities of LXRalpha. The mutual suppression between RORalpha and LXR was supported by the in vivo observation that loss of RORalpha increased the expression of selected LXR target genes, leading to hepatic triglyceride accumulation. Likewise, mice deficient of LXR alpha and beta isoforms showed activation of selected RORalpha target genes. Our results have revealed a novel role for RORalpha and a functional interplay between RORalpha and LXR in regulating endo- and xenobiotic genes, which may have broad implications in metabolic homeostasis.