Hepatic lipase (HL) plays a critical role in the modulation of plasma lipoprotein concentrations and specifically the concentrations of high density lipoproteins and small low density lipoproteins. HL is likely to play a role in cellular cholesterol homeostasis. Despite numerous studies aimed at characterizing HL regulation, the role of cholesterol in controlling HL expression and/or activity levels remains unclear. In Fu5AH and McA-RH7777 rat hepatoma cells, cholesterol treatment resulted in a marked decrease in secreted rat HL (rHL) mass. Similarly, the acyl-CoA:cholesterol acyltransferase inhibitor 58-035 decreased rHL secretion, suggesting that unesterified cholesterol mediated the downregulation. Cholesterol alone or in combination with 25-hydroxy-cholesterol, or 58-035 decreased rHL mRNA levels without affecting mRNA degradation rate. Sterol Regulatory Element Binding Proteins (SREBPs) are the major transcription factors mediating the feedback regulation of cholesterol levels. Sterol treatments decreased nuclear SREBPs in human HepG2 cells without affecting the activity of a -1480/+14 human HL (hHL) promoter luciferase construct in rat or human cells. In HepG2 cells, statin (compactin) treatment or over-expression of nuclear SREBP1a (nSREBP1a) decreased the activity of a -117/+14 hHL promoter construct and HL mRNA levels. Forced expression of nSREBP1a reversed the Upstream Stimulatory Factor 1 (USF1)-mediated activation of hHL promoter constructs. Gel-shift and supershift assays identified binding sites for Hepatocyte Nuclear Factor 1 (HNF1), HNF4 and USF1 within the hHL promoter at -70/-48, -252/-218, and -317/-298 respectively. Binding of these factors was diminished using nuclear extracts from sterol or compactin treated cells. No direct binding of nSREBP to the hHL promoter was identified. SREBP1a bound to USF1 in co-immunoprecipitation experiments, suggesting inhibition of HL transcription by cholesterol or compactin may occur through SREBP1 interaction with USF1 or its co-activators. In rat cells, cholesterol or 58-035 decreased rHL protein synthesis while protein turnover was unchanged. In vitro translation assays demonstrated a decrease in HL translation efficiency in sterol-treated cytoplasmic extracts. These experiments provide evidence for a novel aspect of the function of SREBPs in the crosstalk between cholesterol and fatty acid/triglyceride metabolism