Sterol 27-hydroxylase (CYP27A1) is required for the hepatic conversion of cholesterol into bile acids and for production of 27-hydroxycholesterol which affects cholesterol homeostasis in several ways. Dexamethasone increases hepatic bile acid biosynthesis and CYP27A1-mediated enzyme activity in HepG2 cells. This study examines the mechanism of the dexamethasone-induced effect on the human CYP27A1 promoter. Dexamethasone treatment of HepG2 cells overexpressed with glucocorticoid receptor alpha (GRalpha) increased the CYP27A1 promoter activity more than four-fold as compared with untreated cells. The GR-antagonist mifepristone almost completely abolished the dexamethasone-induced effect on the promoter activity. Progressive deletion analysis of the CYP27A1 promoter indicated that sequences involved in GR-mediated induction by dexamethasone are present in a region between -1094 and -792. Several putative GRE sites could be found in this region and EMSA experiments revealed that two of these could bind GR. Site-directed mutagenesis of GR-binding sequences in the CYP27A1 promoter identified a GRE at -824/-819 important for GR-mediated regulation of the transcriptional activity. Endogenous and pharmacological glucocorticoids may have a strong impact on several aspects of cholesterol homeostasis and other processes related to CYP27A1-mediated metabolism. The glucocorticoid-mediated induction of human CYP27A1 transcription is of particular interest due to the anti-atherogenic properties ascribed to this enzyme.