Large amounts of cholestanol, the 5 alpha-dihydro derivative of cholesterol are found in tissues of patients with the rare inherited sterol storage disease cerebrotendinous xanthomatosis. Although small amounts of cholestanol are present in virtually every tissue of normal man, little is known about its metabolism and effect on cholesterol and bile acid formation. The purpose of this study is to investigate the absorption and metabolism of cholestanol and its early effects on hepatic morphology and on the rate-limiting enzymes of cholesterol and bile acid biosynthesis. After 2 wk on a diet supplemented with 2% cholestanol, total liver sterol content increased by 48% (3.26 vs. 2.20 mg/g), and resulted in a significant rise in hepatic cholestanol concentration to 1.4 mg/g. However, cholestanol was less efficiently absorbed from the intestine than cholesterol and interfered with cholesterol absorption. Furthermore, hepatic hydroxymethylglutaryl-coenzyme A (HMG-CoA) reductase activity rose 2.6-fold (from 150.3 to 397.0 pmol/mg per min) during cholestanol feeding, and was associated with a marked proliferation of the smooth endoplasmic reticulum of the centrilobular areas. In addition, significant amounts of allocholic acid (16%) and allochenodeoxycholic acid (5%) were formed from cholestanol and excreted in the bile. These results show that cholestanol is absorbed from the intestine, interferes with cholesterol absorption, and is deposited in the liver. However, in contrast to cholesterol, cholestanol feeding was associated with a marked elevation of HMG-CoA reductase activity. Thus, despite structural similarity between cholesterol and its 5 alpha-saturated derivative, cholestanol does not exert feedback inhibition on hepatic cholesterol biosynthesis.