The liver X receptors (LXRs) are members of the nuclear hormone receptor superfamily that are bound and activated by oxysterols. These receptors serve as sterol sensors to regulate the transcription of gene products that control intracellular cholesterol homeostasis through catabolism and transport. In this report, we describe a novel LXR target, the sterol regulatory element-binding protein-1c gene (SREBP-1c), which encodes a membrane-bound transcription factor of the basic helix-loop-helix-leucine zipper family. SREBP-1c expression was markedly increased in mouse tissues in an LXR-dependent manner by dietary cholesterol and synthetic agonists for both LXR and its heterodimer partner, the retinoid X receptor (RXR). Expression of the related gene products, SREBP-1a and SREBP-2, were not increased. Analysis of the mouse SREBP-1c gene promoter revealed an RXR/LXR DNA-binding site that is essential for this regulation. The transcriptional increase in SREBP-1c mRNA by RXR/LXR was accompanied by a similar increase in the level of the nuclear, active form of the SREBP-1c protein and an increase in fatty acid synthesis. Because this active form of SREBP-1c controls the transcription of genes involved in fatty acid biosynthesis, our results reveal a unique regulatory interplay between cholesterol and fatty acid metabolism.