Effects of expansion of the hepatic free cholesterol pool on bile acid and cholesterol metabolism and homeostasis were examined in rats fed cholesterol in high-fat diets or treated with oleyl-p-(n-decyl)-benzenesulfonate (ODS) or progesterone. Cholesterol feeding for 10-16 days, which increased free (33%) and esterified (6-fold) cholesterol, had no effect on cholate synthesis, total bile acid synthesis, or cholate turnover, whereas these activities were increased 60-80% by ODS and progesterone, which produced only small increases (19%) in free cholesterol. Cholesterol feeding reduced beta-hydroxy-beta-methylglutaryl (HMG)-CoA reductase (72%) and cholesteryl ester hydrolase (48%) and increased acyl-CoA:cholesterol acyltransferase (184%), whereas ODS and progesterone reversed these compensatory responses in cholesterol-fed rats. Cholesterol 7 alpha-hydroxylase was changed no more than 22% by any treatment. A bolus of ODS elevated biliary cholesterol output 41% and shifted biliary bile acid synthesis and composition toward 12-deoxy bile acids. These effects were not seen in ODS-fed or progesterone-treated rats, in which cholesteryl ester stores were depleted. It is concluded that effects of free cholesterol on bile acid synthesis and biliary cholesterol are probably mediated by specific precursor or regulatory pools which can be independently regulated and which represent a relatively small fraction of hepatic free cholesterol.