Bile acids regulate the expression of genes involved in cholesterol homeostasis. They are ligands of the farnesoid X receptor, which induces small heterodimer partner (SHP)-1, a transcriptional repressor of bile acid synthetic enzymes. In cholestatic liver disease, hepatic bile acid concentrations are elevated and expression of the major Na+-independent bile acid uptake system, organic anion transporting polypeptide (OATP)-C (solute carrier gene family SLC21A6), is markedly decreased. Because the OATP-C gene is transcriptionally dependent on the hepatocyte nuclear factor (HNF) 1 alpha, we hypothesized that bile acids decrease OATP-C expression through direct repression of HNF1 alpha. To test this hypothesis, we studied the regulation of the human HNF1 alpha gene by bile acids. HNF1 alpha expression in cultured hepatoma cells was decreased approximately 50% after 12 hours' exposure to 100 micromol/L chenodeoxycholic acid (CDCA). Characterization of the human HNF1 alpha gene promoter identified a consensus bile acid response element that binds and is activated by HNF4 alpha. Mutagenesis of the HNF4 alpha site abolished baseline HNF1 alpha promoter activity. The central mechanism by which bile acids repress HNF1 alpha is decreased activation by HNF4 alpha. SHP directly inhibits HNF4 alpha-mediated transactivation of the HNF1 alpha promoter in cotransfection assays. In addition, HNF4 alpha nuclear binding activity is decreased by CDCA and the human HNF4 alpha gene promoter is repressed by CDCA through an SHP-independent mechanism. In conclusion, we show that repression of HNF1 alpha is an important new mechanism by which bile acids regulate the expression of HNF1 alpha-dependent genes in man. This explains the suppressive effect of bile acids on the OATP-C gene promoter, leading to decreased expression in cholestatic liver disease.