The molecular modulation of acyl-CoA:cholesterol acyltransferase (EC 2.3.2.26) was studied in the microsomes of rat liver. Acyl-CoA: cholesterol acyltransferase was specifically inactivated by ATP and ADP, requiring Mg2+ as a cofactor. The inactivation was not due to substrate diminution nor to inhibition by the activity of acyl-CoA hydrolase, which was not affected by Mg2+ or ATP+Mg2+. Enhancement of inactivation of acyl-CoA: cholesterol acyltransferase by ATP+Mg2+, NaF and a heat-labile cytosolic factor (or factors) is consistent with a protein-kinase catalyzed phosphorylation being involved in the short term regulation of this enzyme.