Cholesterol 7alpha-hydroxylase gene (CYP7A1) transcription is repressed by bile acids. The goal of this study is to elucidate the mechanism of CYP7A1 transcription by bile acid-activated farnesoid X receptor (FXR) in its native promoter and cellular context and to identify FXR response elements in the gene. In Chinese hamster ovary cells transfected with retinoid X receptor alpha (RXRalpha)/FXR, only chenodeoxycholic acid (CDCA) and deoxycholic acid (DCA) were able to stimulate a heterologous promoter/reporter containing an ecdysone response element. In HepG2 cells, all bile acids (25 microM) were able to repress CYP7A1/luciferase reporter activity, and only CDCA and DCA further repressed reporter activity when cotransfected with RXRalpha/FXR. The concentration of CDCA required to inhibit 50% of reporter activity (IC(50)) was determined to be approximately 25 microM without FXR and 10 microM with FXR. Deletion analysis revealed that the bile acid response element located between nucleotides -148 and -128 was the FXR response element, but RXRalpha/FXR did not bind to this sequence. These results suggest that bile acid-activated FXR exerts its inhibitory effect on CYP7A1 transcription by an indirect mechanism, in contrast to the stimulation and binding of FXR to intestinal bile acid-binding protein gene promoter. Results also reveal that bile acid receptors other than FXR are present in HepG2 cells.