Experimental diabetes in the rat has been shown to result in marked increases in bile acid pool and synthesis. In this study, mechanisms responsible for the increased bile acid synthesis was examined in rats made diabetic with streptozotocin. Our results indicate that a) in diabetic rats, hepatic cholesterol-7 alpha-hydroxylase activity is increased by 100%, b) this increased activity is not due to a higher stimulating activity of cell supernatant factors, but c) may be due to a non-lipoprotein factor(s) in diabetic serum capable of stimulating (by 100%) cholesterol-7 alpha-hydroxylase activity in control livers to the level noted in diabetic animals.