The nuclear receptor farnesoid X receptor (FXR) (nuclear receptor subfamily 1, group H, member 4, or NR1H4) is highly expressed in the liver and intestine. Previous reports have suggested beneficial functions of FXR in the homeostasis of bile acids, lipids, and glucose, as well as in promoting liver regeneration and inhibiting carcinogenesis. To investigate the effect of chronic FXR activation in vivo, we generated transgenic mice that conditionally and tissue specifically express the activated form of FXR in the liver and intestine. Unexpectedly, the transgenic mice showed several intriguing phenotypes, including partial neonatal lethality, growth retardation, and spontaneous liver toxicity. The transgenic mice also displayed heightened sensitivity to a high-cholesterol diet-induced hepatotoxicity but resistance to the gallstone formation. The phenotypes were transgene specific, because they were abolished upon treatment with doxycycline to silence the transgene expression. The perinatal toxicity, which can be rescued by a maternal vitamin supplement, may have resulted from vitamin deficiency due to low biliary bile acid output as a consequence of inhibition of bile acid formation. Our results also suggested that the fibroblast growth factor-inducible immediate-early response protein 14 (Fn14), a member of the proinflammatory TNF family, is a FXR-responsive gene. However, the contribution of Fn14 induction in the perinatal toxic phenotype of the transgenic mice remains to be defined. Because FXR is being explored as a therapeutic target, our results suggested that a chronic activation of this nuclear receptor may have an unintended side effect especially during the perinatal stage.