Liver X receptors (LXRs) are ligand-activated transcription factors of the nuclear receptor superfamily. There are two LXR isoforms termed alpha and beta which upon activation form heterodimers with retinoid X receptor and bind to LXR response element found in the promoter region of the target genes. Their endogenous agonists include a variety of oxidized cholesterol derivatives referred to as oxysterols. In the recent years LXRs have been characterized as key transcriptional regulators of lipid and carbohydrate metabolism. LXRs were shown to function as sterol sensors protecting the cells from cholesterol overload by stimulating reverse cholesterol transport and activating its conversion to bile acids in the liver. This finding led to identification of LXR agonists as potent antiatherogenic agents in rodent models of atherosclerosis. However, first-generation LXR activators were also shown to stimulate lipogenesis via sterol regulatory element binding protein-1c leading to liver steatosis and hypertriglyceridemia. Despite their lipogenic action, LXR agonists possess antidiabetic properties. LXR activation normalizes glycemia and improves insulin sensitivity in rodent models of type 2 diabetes and insulin resistance. Antidiabetic action of LXR agonists is thought to result predominantly from suppression of hepatic gluconeogenesis. However, recent studies suggest that LXR activation may also enhance peripheral glucose uptake. The purpose of this review is to summarize the present state of knowledge on the physiological and pathophysiological implications of LXRs with the special consideration of their role in lipid and carbohydrate metabolism and associated diseases.