The effect of melatonin on cholesterol metabolism in the rat was investigated in the dietary and hypothyroid models of hypercholesterolemia. In normal and dietary hypercholesterolemia (induced by 1% cholesterol, 0.5% bile acid), melatonin treatment (12.5mg/kg i.p.) reduced total serum cholesterol concentration and total low density lipoprotein (VLDL+LDL) cholesterol. The protective action of melatonin was manifested only following the induction of cholesterolemia in such animals. Enhanced catabolism of cholesterol to bile acids is likely involved as shown by an increase in fecal bile acid excretion following melatonin treatment. Incorporation of 1-14C acetate into sterols was unaffected by melatonin treatment which suggests its lack of influence on sterol biosynthesis. In secondary hypercholesterolemia (hypothyroidism induced by 2-thiouracil), melatonin exerted a beneficial effect by increasing the HDL/total LDL cholesterol ratio. These findings suggest that the hypocholesterolemic effect of melatonin may work through the augmentation of endogenous cholesterol clearance mechanisms. This is accompanied by the lowering of the cholesterol fraction associated with low density lipoproteins.