The synthesis of cholesterol and its uptake from plasma LDL are regulated by two membrane-bound transcription factors, designated sterol regulatory element binding protein-1 and -2 (SREBP-1 and SREBP-2). Here, we used the technique of homologous recombination to generate mice with disruptions in the gene encoding the two isoforms of SREBP-1, termed SREBP-1a and SREBP-1c. Heterozygous gene-disrupted mice were phenotypically normal, but 50- 85% of the homozygous (-/-) mice died in utero at embryonic day 11. The surviving -/- mice appeared normal at birth and throughout life. Their livers expressed no functional SREBP-1. There was a 1.5-fold upregulation of SREBP-2 at the level of mRNA and a two- to threefold increase in the amount of mature SREBP-2 in liver nuclei. Previous studies showed that SREBP-2 is much more potent than SREBP-1c, the predominant hepatic isoform of SREBP-1, in activating transcription of genes encoding enzymes of cholesterol synthesis. Consistent with this observation, the SREBP-1 -/- animals manifested elevated levels of mRNAs for 3-hydroxy-3-methylglutaryl coenzyme A synthase and reductase, farnesyl diphosphate synthase, and squalene synthase. Cholesterol synthesis, as measured by the incorporation of [3H]water, was elevated threefold in livers of the -/- mice, and hepatic cholesterol content was increased by 50%. Fatty acid synthesis was decreased in livers of the -/- mice. The amount of white adipose tissue was not significantly decreased, and the levels of mRNAs for lipogenic enzymes, adipocyte lipid binding protein, lipoprotein lipase, and leptin were normal in the -/- mice. We conclude from these studies that SREBP-2 can replace SREBP-1 in regulating cholesterol synthesis in livers of mice and that the higher potency of SREBP-2 relative to SREBP-1c leads to excessive hepatic cholesterol synthesis in these animals.