SHP (small heterodimer partner, NR1I0) is an atypical orphan member of the nuclear receptor subfamily in that it lacks a DNA-binding domain. It is mostly expressed in the liver, where it binds to and inhibits the function of nuclear receptors. SHP is up-regulated by primary bile acids, through the activation of their receptor farnesoid X receptor, leading to the repression of cholesterol 7alpha-hydroxylase (CYP7alpha) expression, the rate-limiting enzyme in bile acid production from cholesterol. PXR (pregnane X receptor, NR1I2) is a broad-specificity sensor that recognizes a wide variety of synthetic drugs as well as endogenous compounds such as bile acid precursors. Upon activation, PXR induces CYP3A and inhibits CYP7alpha, suggesting that PXR can act on both bile acid synthesis and elimination. Indeed, CYP7alpha and CYP3A are involved in biochemical pathways leading to cholesterol conversion into primary bile acids, whereas CYP3A is also involved in the detoxification of toxic secondary bile acid derivatives. Here, we show that PXR is a target for SHP. Using pull-down assays, we show that SHP interacts with both murine and human PXR in a ligand-dependent manner. From transient transfection assays, SHP is shown to be a potent repressor of PXR transactivation. Furthermore, we report that chenodeoxycholic acid and cholic acid, two farnesoid X receptor ligands, induce up-regulation of SHP and provoke a repression of PXR-mediated CYP3A induction in human hepatocytes as well as in vivo in mice. These results reveal an elaborate regulatory cascade, tightly controlled by SHP, for both the maintenance of bile acid production and detoxification in the liver.