Fatty acid metabolism is transcriptionally regulated by two reciprocal systems: peroxisome proliferator-activated receptor (PPAR) alpha controls fatty acid degradation, whereas sterol regulatory element-binding protein-1c activated by liver X receptor (LXR) regulates fatty acid synthesis. To explore potential interactions between LXR and PPAR, the effect of LXR activation on PPARalpha signaling was investigated. In luciferase reporter gene assays, overexpression of LXRalpha or beta suppressed PPARalpha-induced peroxisome proliferator response element-luciferase activity in a dose-dependent manner. LXR agonists, T0901317 and 22(R)-hydroxycholesterol, dose dependently enhanced the suppressive effects of LXRs. Gel shift assays demonstrated that LXR reduced binding of PPARalpha/retinoid X receptor (RXR) alpha to peroxisome proliferator response element. Addition of increasing amounts of RXRalpha restored these inhibitory effects in both luciferase and gel shift assays, suggesting the presence of RXRalpha competition. In vitro protein binding assays demonstrated that activation of LXR by an LXR agonist promoted formation of LXR/RXRalpha and, more importantly, LXR/PPARalpha heterodimers, leading to a reduction of PPARalpha/RXRalpha formation. Supportively, in vivo administration of the LXR ligand to mice and rat primary hepatocytes substantially decreased hepatic mRNA levels of PPARalpha-targeted genes in both basal and PPARalpha agonist-induced conditions. The amount of nuclear PPARalpha/RXR heterodimers in the mouse livers was induced by treatment with PPARalpha ligand, and was suppressed by superimposed LXR ligand. Taken together with data from the accompanying paper (Yoshikawa, T., T. Ide, H. Shimano, N. Yahagi, M. Amemiya-Kudo, T. Matsuzaka, S. Yatoh, T. Kitamine, H. Okazaki, Y. Tamura, M. Sekiya, A. Takahashi, A. H. Hasty, R. Sato, H. Sone, J. Osuga, S. Ishibashi, and N. Yamada, Endocrinology 144:1240-1254) describing PPARalpha suppression of the LXR-sterol regulatory element-binding protein-1c pathway, we propose the presence of an intricate network of nutritional transcription factors with mutual interactions, resulting in efficient reciprocal regulation of lipid degradation and lipogenesis.