Bile acid synthesis occurs mainly via two pathways: the "classic" pathway, initiated by microsomal cholesterol 7alpha-hydroxylase (CYP7A1), and an "alternative" (acidic) pathway, initiated by sterol 27-hydroxylase (CYP27). CYP27 is located in the inner mitochondrial membrane, where cholesterol content is very low. We hypothesized that cholesterol transport into mitochondria may be rate-limiting for bile acid synthesis via the "alternative" pathway. Overexpression of the gene encoding steroidogenic acute regulatory (StAR) protein, a known mitochondrial cholesterol transport protein, led to a 5-fold increase in bile acid synthesis. An increase in StAR protein coincided with an increase in bile acid synthesis. CYP27 overexpression increased bile acid synthesis by <2-fold. The rates of bile acid synthesis following a combination of StAR plus CYP27 overexpression were similar to those obtained with StAR alone. TLC analysis of (14)C-labeled bile acids synthesized in cells overexpressing StAR showed a 5-fold increase in muricholic acid; in chloroform-extractable products, a dramatic increase was seen in bile acid biosynthesis intermediates (27- and 7,27-hydroxycholesterol). High-performance liquid chromatography analysis showed that 27-hydroxycholesterol accumulated in the mitochondria of StAR-overexpressing cells only. These findings suggest that cholesterol delivery to the inner mitochondrial membrane is the predominant rate-determining step for bile acid synthesis via the alternative pathway.