Bile acid synthesis is a major pathway for cholesterol disposal and thus represents a potential therapeutic target pathway for the treatment of hypercholesterolemia. Recently, the nuclear farnesoid X receptor (FXR) was identified as a bile acid receptor and biological sensor for the regulation of bile acid biosynthesis. FXR was shown to regulate cholesterol metabolism in two ways: (1) chenodeoxycholic acid (CDCA), a primary bile acid, binds directly to and activates FXR, which then mediates the feedback suppression by bile acids of cholesterol 7 alpha-hydroxylase (CYP7A1), the rate-limiting enzyme in bile acid biosynthesis from cholesterol; and (2) FXR participates in the activation of intestinal bile acid binding protein (IBABP), which is involved in the enterohepatic circulation of bile acids. Thus FXR constitutes a potential therapeutic target that can be modulated to enhance the removal of cholesterol from the body.