Chloroquine is an effective inhibitor of cholesterol synthesis in freshly isolated rat hepatocytes, cultured mouse L cells and 20,000 X g supernatants of mouse liver homogenates. Half-maximal inhibition is found at concentrations ranging from 10 to 30 microM. The drug specifically inhibits 2,3 oxidosqualene cyclase, the enzyme catalysing the conversion of squalene 2,3 oxide into lanosterol. Chloroquine also inhibits the lysosomal hydrolysis of cholesteryl esters, but probably this effect only occurs at somewhat higher concentrations of the drug. It is suggested that chloroquine at proper doses, in combination with a bile acid-binding resin, might have potential value in the treatment of hypercholesterolemia.