The NH2-terminal domain of sterol-regulatory element binding protein-1a (SREBP-1a) activates transcription of genes encoding enzymes of cholesterol and fatty acid biosynthesis in cultured cells. This domain is synthesized as part of a membrane-bound precursor that is attached to the nuclear envelope and endoplasmic reticulum. In sterol-depleted cells a two-step proteolytic process releases this NH2-terminal domain, which enters the nucleus and activates transcription. Proteolysis is suppressed by sterols, thereby suppressing transcription. In the current experiments we produce transgenic mice that overexpress a truncated version of human SREBP-1a that includes the NH2-terminal domain but lacks the membrane attachment site. This protein enters the nucleus without a requirement for proteolysis, and therefore it cannot be down-regulated. Expression was driven by the phosphoenolpyruvate carboxykinase (PEPCK) promoter, which gives high level expression in liver. When placed on a low carbohydrate/high protein diet to induce the PEPCK promoter, the transgenic mice developed progressive and massive enlargement of the liver, owing to the engorgement of hepatocytes with cholesterol and triglycerides. The mRNAs encoding 3-hydroxy-3-methylglutaryl CoA (HMG CoA) synthase, HMG CoA reductase, squalene synthase, acetyl-CoA carboxylase, fatty acid synthase, and stearoyl-CoA desaturase-1 were all elevated markedly, as was the LDL receptor mRNA. The rates of cholesterol and fatty acid synthesis in liver were elevated 5- and 25-fold, respectively. Remarkably, plasma lipid levels were not elevated. The amount of white adipose tissue decreased progressively as the liver enlarged. These studies indicate that the NH2-terminal domain of SREBP-1a can produce major effects on lipid synthesis and storage in the liver.