In view of the reported excess prevalence of atherosclerosis and cholelithiasis in diabetes, we investigated several aspects of cholesterol metabolism under metabolic ward conditions in six Pima Indians with maturity-onset diabetes mellitus. Cholesterol balance (13.5 versus 11.0 mg per kilogram per day, P less than 0.05), fecal bile acid excretion (415 versus 261 mg per day, P less than 0.05), bile acid pool size (3150 versus 1950 mg, P less than 0.05), fasting plasma cholesterol (193 versus 160 mg per deciliter, P less than 0.05) and plasma triglycerides (251 versus 150 mg per deciliter, P less than 0.05) were higher during uncontrolled hyperglycemia than during relative euglycemia on insulin. The increased plasma lipid levels and total cholesterol synthesis during hyperglycemia may contribute to the acceleration of atherosclerosis in diabetes mellitus. Gallbladder bile was significantly more saturated with cholesterol (181 per cent versus 114 per cent, P less than 0.05) during insulin treatment than during uncontrolled hyperglycemia. Bile lipid composition was thus more favorable to cholesterol precipitation and gallstone formation during insulin treatment than in the untreated diabetic state.