Bile acids are important physiological agents required for disposal of cholesterol and absorption of vitamins and fats. Bile acids are synthesized from cholesterol in the liver. Enterohepatic circulation of bile acids is very efficient and plays an important physiological role in lipid absorption and secretion, and regulation of bile acid biosynthesis and cholesterol homeostasis. Conversion of cholesterol to bile acids requires 15 different enzymatic steps. Four cytochrome P450 enzymes play important roles in bile acid biosynthesis. The classic bile acid biosynthesis pathway starts with modification of the sterol ring and followed by side chain cleavage reactions to synthesize cholic acid (CA) and chenodeoxycholic acid (CDCA), the primary bile acids in most species. The first and rate-limiting enzyme in this pathway is cholesterol 7alpha -hydroxylase, a microsomal cytochrome P450, CYP7A. Another microsomal cytochrome P450 sterol 12alpha-hydroxylase (CYP12) is required for the synthesis of cholic acid. Mitochondrial cytochrome P450 sterol 27-hydroxylase (CYP27) catalyzes sterol side chain oxidation to convert C27 sterol to C24 bile acids. An alternative bile acid biosynthesis pathway (acidic) has been known for sometime but only recently has attracted much attention. In this pathway, side chain oxidation precedes modification of the sterol ring. Mitochondrial sterol 27-hydroxylase (CYP27) catalyzes the first reaction and followed by 7alpha-hydroxylation catalyzed by a microsomal oxysterol 7alpha-hydroxylase (CYP7B). Recent advances in purification and cloning of these major enzymes in the pathways have led to better understanding the molecular basis of regulation of bile acid synthesis and physiological role of the alternative pathways.