The formation of oxysterols in cultured human fibroblasts and their physiological roles as intracellular regulators of cholesterol production have been investigated. In the presence of low density lipoproteins (LDL) normal fibroblasts converted LDL cholesterol to the oxysterol 27-hydroxycholesterol in quantities apparently sufficient to down-regulate 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase. The production of 27-hydroxycholesterol started 3-8 h after the addition of LDL to the incubation medium, and during this time the activity of HMG-CoA reductase decreased by 73%. Formation of other biologically active oxysterols such as 7 alpha-hydroxycholesterol, 24-hydroxycholesterol, and 25-hydroxycholesterol was not observed. When 27-hydroxylation of LDL cholesterol in mitochondria was selectively prevented by treating normal fibroblasts with cyclosporin A or by using fibroblasts genetically lacking sterol 27-hydroxylase, the suppressive effect of LDL on HMG-CoA reductase was reduced by a factor of about 10. In the absence of LDL or when the fibroblasts lacked LDL-receptors, the cells did not produce detectable amounts of 27-hydroxycholesterol, and HMG-CoA reductase was up-regulated. The results provide strong evidence that 27-hydroxycholesterol is an important intracellular mediator between LDL and the suppression of HMG-CoA reductase in human fibroblasts. The mitochondrial uptake/metabolism of LDL cholesterol seems to be a biologically important extension of the LDL pathway in human cells, since the mitochondrial products of LDL cholesterol may regulate cholesterol homeostasis or be precursors of steroid hormones or bile acids. This pathway, which has now been demonstrated in fibroblasts, may link together the two 22-year-old observations that LDL as well as oxysterols can down-regulate HMG-CoA reductase in cells.