We have previously reported the isolation of Chinese hamster ovary cell mutants deficient in acylcoenzyme A/cholesterol acyltransferase (ACAT) activity (Cadigan, K. M., J. G. Heider, and T. Y. Chang. 1988, J. Biol. Chem. 263:274-282). We now describe a procedure for isolating cells from these mutants that have regained the ability to synthesize cholesterol esters. The protocol uses the fluorescent stain Nile red, which is specific for neutral lipids such as cholesterol ester. After ACAT mutant populations were subjected to chemical mutagenesis or transfected with human fibroblast whole genomic DNA, two revertants and one primary transformant were isolated by virtue of their higher fluorescent intensities using flow cytofluorimetry. Both the revertants and transformant have regained large amounts of intracellular cholesterol ester and ACAT activity. However, heat inactivation experiments revealed that the enzyme activity of the transformant had heat stability properties identical to that of human fibroblasts, while the ACAT activities of the revertants were similar to that of other Chinese hamster ovary cell lines. These results suggest that the molecular lesion in the ACAT mutants resides in the structural gene for the enzyme, and the transformant has corrected this defect by acquiring and stably expressing a human gene encoding the ACAT polypeptide. Secondary transformants were isolated by transfection of ACAT mutant cells with primary transformant genomic DNA. Genomic Southern analysis of the secondary transformants using a probe specific for human DNA revealed several distinct restriction fragments common to all the transformants which most likely comprise part or all of the human ACAT gene. The cell lines described here should facilitate the cloning of the gene encoding the human ACAT enzyme.